Ask The Money Coach

Posts Tagged ‘credit re-scoring’

How to quickly boost your credit score

Q: I Have a Credit Score of 625 and Am Trying to Refinance a Loan. The Bank Says My Credit Score Must Be a 700 to Get a Loan With Them. I Have an Existing Loan and When I Got it 4 Years Ago, My Score Was About a 710. I Need to Fix My Credit Soon Because My Loan is a Balloon Loan (That Comes Due) In About a Year. How Can I Clean Up My Credit Quickly?

A: The two absolute fastest ways to significantly boost your credit scores both involve getting negative information deleted from your credit files. If you have anything negative on your Equifax, Experian or TransUnion reports that is outdated, inaccurate or that can’t be verified, try contesting that information directly with the credit bureaus. Use their online credit dispute services for the fastest possible results. I’ve disputed information online and had erroneous information removed in just a day or two. Here are the direct websites for the credit bureaus to initiate an online dispute:

http://www.investigate.equifax.com
http://www.Experian.com/disputes
http://www.Transunion.com/investigate

Additionally, since you are trying to get a mortgage, you can utilize a service known as “rapid re-scoring” also known as “credit re-scoring.” Read this post about rapid re-scoring to learn how to get errors removed from your credit report in just 48 hours.

There’s no guarantee that either of these methods will boost your credit score by the 75 points you are seeking, but it’s certainly worth a shot. And if there is negative information that gets removed, you will likely experience some boost to your FICO scores.

However, if there are no mistakes to dispute, trying paying off some or all of your credit card debt. That will usually improve your credit scores. Even though it may be a hardship to come up with the money to pay off credit card bills, it’s helpful to become debt-free. Not to mention the short-and long-term savings it will net you from snagging that better loan when you are able to refinance.

For more tips on how to improve your credit score, pick up a copy of Perfect Credit: 7 Steps To A Great Credit Rating

How can I remove negative information from my credit report so that I can qualify for a home loan?

Author: The Money Coach

Q: I am Trying to Get Pre-Approved for a Home Loan, So I Have Been Tracking Credit Reports and Scores Daily. There are 3 Hard Inquiries That Would Boost My Score Some 30 Points, Once Removed. They Were Supposed to Be Removed as of 02/01/2010. The Inquiries Were Pulled on January 9, 2008. Since These Are Only Supposed to Be on My Credit for 2 Years, What Can I Do So That the Bureaus Update My Reports and Remove These Inquiries?

A: You are correct that inquiries are only supposed to last for two years and been seen for those two years on your credit report. However, in terms of your FICO credit scores, it’s the hard inquiries that occurred within the past 12 months that will lower your score. So I’m not convinced that removing those 3 hard inquiries will get you that 30 point rise in your score you anticipate. It’s possible. But just realize that a whole host of factors go into the overall calculation for your credit scores; inquiries are just one part of the picture. Having said this, I believe you can get those inquiries more quickly removed in order to make sure you qualify for the best possible mortgage loan rates and terms. Get the information changed by doing one of two things: disputing the information with the credit bureaus or using “rapid re-scoring.” Read on for more details about both options.

Using Online Dispute Services at the Credit Bureaus

To eliminate those old inquires, you can use the online dispute services offered by the credit bureaus. Just go to their websites and dispute the inquiries online at Equifax, Experian and TransUnion on the grounds that this is old, outdated information. By law, outdated information is not supposed to appear in your credit files. You can dispute mistakes with the credit bureaus by mail or telephone, but you’ll get the fastest results if you initiate a dispute online. Here are the websites and phone numbers you should use for the credit bureaus when you contact them to dispute errors:

http://www.investigate.equifax.com or 888-800-8859

http://www.Experian.com/disputes or 866-200-6020

http://www.Transunion.com/investigate or 800-916-8800

Don’t pay for any credit reports at the bureaus. Just use the links I just provided and get a free copy of your report, if necessary, on the grounds that your account contains inaccurate/outdated info. I’ve had outdated and inaccurate information to my credit reports fixed very, very quickly – in just a day or two.

Use Rapid Re-Scoring

Another option: have your lender or mortgage broker do something called “credit re-scoring” or “rapid re-scoring.” Credit re-scoring allows bankers, mortgage brokers, and other lenders to submit proof of a mistake in your credit file directly to the credit agencies. The proof has to be something official, such as a letter from the IRS showing that a tax lien has been paid or a court document that indicates a previous bankruptcy was discharged on a certain date. With satisfactory proof and a request from a mortgage professional, the credit agencies give your file priority status, and quickly update your credit information electronically. It usually happens in two or three days. This way, an error in your credit file doesn’t cost you more money or jeopardize your chance of getting a mortgage. In your case, I’m not certain what documentation can be supplied to the credit bureaus. A simple letter from your lender may suffice as the date of the inquiries themselves will be self-evident to the bureaus.

Get Your Lender Involved

One limit to this process, however, is that you can’t initiate a request for credit re-scoring on your own. Only lenders and other mortgage professionals can do so. The good news is that some companies, such as Novi, Michigan-based Credit Technologies (http://www.credittechnologies.com), can help you connect with a lender that can request credit re-scoring on your behalf. Credit Technologies provides this information free of charge to consumers. They’ll even email it to you, so you can get a list of lenders quickly. Alternatively, if you already have a lender, but they don’t know about credit re-scoring, have the lender contact Credit Technologies directly at 800-445-4922 in order to do credit re-scoring. Credit Technologies doesn’t guarantee that your score will increase as a result of credit-rescoring, but the company does report that the typical client experiences a 30-point jump in his or her FICO score.
If you can get your lender involved, your credit report will be updated much faster than you could have done on your own. Fixing erroneous information that is lowering your FICO score could mean the difference between your getting a so-so deal on your mortgage, or getting a home loan with a great rate and attractive terms. Good luck!

How Do Mistakes In My Credit Report Happen and What Can I Do About Them?

Author: The Money Coach

Consumer groups estimate that 70% of all credit reports have mistakes in them. That’s an awful lot of misinformation – and it could be costing you money. If you have errors in your credit file and you’re in the market for a loan, you could wind up paying a lot more in interest than you rightfully should. Mistakes happen for a lot of reasons. Sometimes there’s an inputting error by a clerk who erroneously types something, like the spelling of your name, and then you get confused with someone else. Or maybe one of the digits in your social security number is inadvertently transposed, and inaccurate information starts to be reported about you. In other cases, family members have found that their credit files somehow get mistakenly co-mingled. For instance, Fred Jones Jr. might find that his credit report lists some accounts that belong to his father, Fred Jones Sr. Whatever the cause, mistakes in your credit should be dealt with as soon as you discover them.

Fix Errors and Protect Your Credit

Also, because of the massive amounts of credit information flying around, it’s no wonder that mistakes routinely occur. Roughly 100,000 organizations supply information to the credit reporting agencies. These organizations include banks, lenders, collection agencies, credit card companies, leasing firms, utility companies and any other entity that extends credit or reports information about you. The average person’s credit report is updated five times each day. Five billion pieces of information are added to credit files every month. And two million credit reports are ordered on a daily basis from credit bureaus. We all know about the dominant players in the credit bureau industry – Equifax, Experian and TransUnion – but there are actually more than 1,000 consumer reporting agencies in the United States. Clearly, because of sheer volume alone, errors in credit files are bound to happen. But if there’s a mistake in your credit report, it’s up to you to fix it.

The Dispute Resolution Process

Each credit bureau has a dispute resolution process that requires you to you write a letter to the credit agency and state what information is inaccurate or incomplete in your credit file. Under the Fair Credit Reporting Act, the credit bureau has 30 days to investigate your claims and notify you of the results. Writing the credit bureaus is typically most effective when there is identity confusion, when personal information about you is listed incorrectly, or when your file contains completely wrong data – such as account that you never opened.

What To Do When Your Creditors Report Misinformation

But let’s say that you find an error based on misinformation that was supplied by one of your creditors. This would be the case if you closed an account, yet the account still shows open; if you have been reported as paying late, but you actually made your payment on time; or if you paid off an account, but the your credit report still shows a balance. In all of these instances, it’s best to contact the source of the information and ask them to fix the mistake. If it’s a legitimate error, without much to dispute, the company will readily address the problem. Even if they have to do their own investigation – perhaps because your claim is not so cut-and-dried – it’s usually better to start with the creditor. The reason is that when you dispute something with the credit bureau, that information may get changed, but then the next month it’s possible that it could re-appear in your credit file. Errors that are disputed and resolved at the creditor level are far more likely to remain off of your credit report.

Applying for a Mortgage? Fix Credit Mistakes in Just 2 Days

Updates to your credit file usually take about 30 to 45 days to happen. However, if you’re in the market for a mortgage, you can have mistakes in your credit report fixed in as little as 48 hours. It’s through a process called “Credit Re-Scoring.” It allows mortgage bankers to submit proof of a mistake in your credit file directly to the credit agencies. In turn, those agencies give your file priority status, and quickly update your credit information electronically. This way, an error in your credit file doesn’t cost you more money or jeopardize your chance to get that mortgage.