What is rapid re-score and how does it work?

Your Credit Minute Show Notes:

  • 00:00                                   What’s up, YouTubers? Today we are going to talk about rapid rescores, the fastest, fastest way to increase your credit score. And we get a million questions a minute about this. Rapid rescores. “Hey, can you do a rapid rescore for me, Nik?” “I need a rapid rescore.” “Just rapid rescore that thing.”
  • 00:18                                   What’s a rapid rescore? Does anyone even know really what this means? Well, we’re going to talk about it today here at Your Credit Minute. Let’s talk about rapid rescores, how this can help you close on your mortgage much quicker with a lower rate, how much it costs, how long does it take, let’s detail everything.
  • 00:34                                   So, guys, rapid rescore is typical a product that’s only provided by your mortgage company. Okay? You go in for a mortgage and they pull up your credit report and your score is 680, and they’re not giving you the best rate possible. And you’re wondering why. You’ve looked at your credit, you’ve never had a late, you don’t have any derogatory information, but your credit score is still no more than average, and you’re wondering, “What can I do?” Well, the first thing you’re going to do is you’re going to call me, right? And I’m going to tell you, “Guys, you don’t need credit repair.” Okay? But you’re still wondering, “What do I do? How do I get my credit score up?” And typically, what I’m going to tell you is you got to pay down your credit card balances, right? We’ve talked about this in all of our previous videos where your credit card utilization rate is about 30% of what makes up your credit score. So, here are your credit limits, here are your credit balances. A little too close. The ratio or that credit card utilization rate is far higher than it needs to be.
  • 01:28                                   So, what will Nik tell you? Pay down those credit cards, right? Bring down that utilization rate. Bring down that ratio, uh, as low as you can, okay? Really, what you want to do is you want to have your credit card balances or any sort of lines of credit below the 10% credit limit mark before you apply for any sort of a mortgage, or a card lending product, anything that’s major where you’re going to get a longer term interest rate and you’re going to end up overpaying for many, many years if your credit score isn’t exactly where it needs to be.
  • 01:58                                   Now, here’s the problem, okay? You’ve paid down your credit card, um, it’s down to zero, you did it the day I asked you to do it. You go back to your lender and you say, “Hey, Mr. Banker Guy, time to close on my mortgage. I- I- I paid off all my credit cards. That 680 should be a 780 now. It should be a- a- a- a million eighty. Um, you know, let’s- let’s do a rerun my credit.” Your loan officer reruns the credit. Lo and behold, your credit score is exactly the same. Why?
  • 02:29                                   Because typically the items … the activities that’s happening on your credit report today, it’s really not going to show up for at least, at least another 30, 60, sometimes 90 days. It really depends on when that creditor, that credit card company’s taking all that data and batching it out to the credit agencies. And we don’t know when that’s going to happen. That’s really up to them, okay?
  • 02:52                                   So, what do we do? We found the house of our dreams, but we can’t buy it ’cause we’re going to get stuck with this lousy interest rate, okay, um, because of a credit score that really isn’t reflecting where my current position is with my credit cards, okay?
  • 03:05                                   Um, and this is where rapid rescore comes in, okay? Also, some lenders are going to call it a CBU, okay? And that’s going to stand for Credit bureau update. It’s really all the same. And this is just some fancy marketing.
  • 03:21                                   So, what you’re going to do is you’re going to take copies, okay, of your statements online, you’re going to print everything out, showing that you paid off that debt, that it’s now a zero balance, okay? And you’re going to submit it to your loan officer. As long as your loan officer offers that product, okay, some loan officers don’t, some banks don’t, um, your loan officer is going to go back to his credit vendor, which could be like a LandSafe, it could be a Birchwood, these are the companies that actually pull the credit report for, uh, the purpose of lending for them, okay?
  • 03:50                                   Now, that company then is typically going to have a team on staff that will call your banker lender, okay, will call your credit card company, and will verify over the phone that that balance is, in fact, now a zero balance, okay? And they have been given the right by Experian, Equifax, and TransUnion, the three major credit bureaus, to go in and actually update that balance right then and there to reflect a zero. And they’ll tell the lender, “Hey, re-pull a credit report. Balance is now showing zero.” Lender re-pulls the credit report and, voila, you have your rapid rescore. That score has shot up to, you know, from that 680 to that 780 or 750 or whatever that number is going to be ’cause you’ve paid off all your credit card balances, okay?
  • 04:34                                   This process typically takes three to five days to accomplish versus the 30 to 60 days of just waiting around after you’ve paid off your credit card balances. The cost to you, the consumer, is usually zero, okay? I know the lenders right now are paying somewhere in the vicinity of 30 to $50 per update, per credit bureau, which is fairly expensive on their end, so they’re going to make sure they, you know, they have a solid application before they do all this work for you, um, ’cause it’s- it’s coming out of their pocket first. And I- I believe in certain cases they even bill you at the end of your loan, okay? But it is a great product. It’s something that’s available. You do have to be in process with a mortgage company. It’s not something that’s offered out online. It’s not something even a credit repair company can do for you.
  • 05:20                                   Now, keep in mind, this process is not credit repair. A mortgage lender does not do credit repair. They’re simply updating things that have been paid off, okay? So, if you just paid off a bunch of things, your credit’s not where it needs to be, but you found the home of your dreams, it’d probably be worth having a conversation with a local lender that you trust, that you found through, you know, whatever source it’s going to be, your realtor, the local Better B- … Better Business Bureau and discussing the rapid rescore or CBU product.
  • 05:50                                   Uh, guys, this is Nik Tsoukales with Key Credit Repair. Thanks for checking us out every single day here on YouTube and Facebook. Um, please click the subscribe button below and check us out on a daily basis. And if you have any credit questions, um, beyond what you’ve seen in some of these videos or even your consultation, if you’ve spoken to us already, shoot me an instant message, shoot me an email, at NTsoukales@KeyCreditRepair.com and I’ll make sure I answer it right away. Thanks, guys. Have a great day.

 

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Tax Liens, Judgments Could Be Omitted from Credit Reports in Near Future

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For tax liens The Consumer Financial Protection Bureau (CFPB) has been winning a lot of battles for the people lately. Aside from socking Equifax and TransUnion with fines for deceiving consumers back in January. More recently, it hit Experian with a $3 million fine for the same thing in March. Now, it’s recently championed an effort to change the way tax liens and judgments are reported on your credit record. It’s a major shakeup when it comes to credit reporting.

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Specifically, per a report in the Wall Street Journal, Experian, Equifax and TransUnion – the three major credit reporting agencies – will soon be readjusting their respective credit reporting models to omit tax liens and judgments. It’s a move that could help out millions of Americans when it comes taking control of their finances in the future.

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What This Means

This move looks to help out millions of consumers and could very well raise the overall average credit score nationwide. This news is especially significant when you consider how crippling tax liens and judgments currently are to most consumers. Presently, tax liens and judgments, even if they’ve been resolved, can stay on a credit report for up to 10 years. That’s right, even if they’ve been paid off, a consumer’s best bet is to get it released and then petition the credit agencies to remove it from their record to avoid extensive credit repair.

Unresolved liens and judgments stay on a credit report for 15 years.

To be fair, there’s still some things that we don’t yet know when it comes to this news. For instance, will consumers have to petition the agencies to have liens and judgments removed? Or will the agencies perform this automatically? That’s an unknown. What’s not an unknown, however, is how positive a move like this can be for consumers.

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Not Everyone’s Happy About It

While consumers should be welcoming this news, not everyone is happy about it. For instance, this report is putting lenders a little bit on edge. Why? Simple – it provides less data for them to assess consumer risk. When lenders make the decision on whether or not to approve a loan, it becomes a question largely of how reliable of a consumer they’re working with. A tax lien or judgment on one’s credit report would certainly factor into their decision, and being that it can take up to 15 years for such to be removed from an individual’s credit report, it provides lenders with more of a comprehensive history of consumer behavior. This news, obviously, alters that, giving lenders one less thing to ultimately analyze. In a worst-case-scenario situation, it could wind up burning a lender in the long run.

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