When you apply for a large loan like a mortgage, a small increase in your credit score, and thus your interest rate, can save you tens of thousands of dollars over the life of the loan.
Basics of Rapid Reassessment
Rapid reassessment is a service used by lenders to obtain recent updates to your account history that are reflected in your credit reports within an accelerated timeframe. Instead of waiting for the information in your credit reports to be updated by the next billing cycle, you can update that information with the help of your lender within days.
Examples of Rapid Reassessment
Use these scenarios to understand when rapid reassessment is appropriate and how it can benefit your credit score and loan opportunities.
Limitations of Rapid Reassessment
While this service allows you to quickly update your credit reports, it is important to understand its limitations, which are as follows:
How to Use Rapid Reassessment
Rapid reassessment is a service requested by your lender on your behalf, so you will need to ask your lender for it if you want a rapid reassessment. You will need to be able to improve your credit reports. If you can do it, take the necessary steps to improve your score. Your lender will then submit proof of the update to the credit reporting agency, which will update your credit reports within an accelerated timeframe. The next time you request your new credit score from that agency, you’re likely to receive a higher score and get approved at a lower rate.
How Much Does Rapid Reassessment Cost
Lenders pay fees to credit reporting agencies to request updates to your credit reports, but the borrower usually does not pay fees for the service. Under the Financial Consumer Protection Law, borrowers are not allowed to charge borrowers for disputes regarding errors in credit reports. However, nothing is free – you will pay for your lender’s capabilities in the interest rate and closing costs of the loan.
How Long Does It Take
The word “rapid” means different things to different people. Rapid reassessment companies promise results within one to five days. However, you can expect it to take about a week – a reputable lender can provide more detailed guidance. In some cases, it may take longer before everything is submitted and updated. It takes time to gather information, send payments, and submit documentation.
Alternatives
If rapid reassessment is not an option or is not suitable for your situation, consider other ways to improve your credit: talk to multiple lenders: approval criteria and services offered vary among different lenders. It’s always a good idea to shop around. One lender may offer rapid reassessment or approve an affordable loan with your current credit even if others do not or do not want to work with you. Paying off loans: getting approved often involves ensuring that your payments will be affordable. If you have cash on hand, pay off loans to reduce your monthly obligations (and improve your debt-to-income ratio). This alone may be enough to qualify for a good loan with some lenders.
Advance Planning
Rapid reassessment can help you make quick fixes, but in reality, you should have everything in mind before applying for a loan. This way, you will have one less thing to worry about when you are in the middle of a complicated and stressful loan process. Regularly check your credit reports, fix any errors, and keep your credit card balances low so that there is nothing to fix the next time you apply for a loan.
Questions
Repeated
How can you update personal information in your credit report?
The easiest way to update personal information in your credit report is to update it with your creditors. Creditors report your account each month, sending your current balance along with any updates to your personal information such as your address. You can also update your information with each credit reporting agency individually.
What is the rate of updating your credit report?
Your credit report is updated whenever creditors provide new information. Creditors typically update it once a month. If you have multiple accounts on your credit report (and most people do), that means your report will be updated once a month for each creditor. Credit inquiries, which are requests for your credit history, and other events like bankruptcies are also added to your credit report as they occur, and your report will be updated accordingly.
Source: https://www.thebalancemoney.com/rapid-rescoring-to-raise-credit-scores-4144660
Leave a Reply