Raise Your Credit Score In Record Time 1-17-2011 - CBS46 News

Raise Your Credit Score In Record Time 1-17-2011

By Kim Fettig, CBS Atlanta Consumer Reporter
ATLANTADeborah Davenport stumbled upon a great deal on a house recently and knew she wanted to buy. But she wanted something else, too.
"I was looking for the best rate I could get on a mortgage," she said.
Not liking the interest rate the mortgage company offered, Davenport went to a credit expert for advice on how to bump up her credit score in a hurry.
His No. 1 tip: Pay off a credit card on which she owed $500. It wasn't a lot of money in her case, but because the card limit was only $700, it ruined her credit to debt ratio, which had a direct impact on her score.
"So by paying that $500 and now putting the card to a zero balance, it lowered my ratios," Davenport said.
She couldn't wait the 30 to 45 days for the payoff to be reported to the credit agencies, so she had her lender request a rapid re-score.
"Rapid re-score is essentially an unscheduled update to the information on your credit report," said Credit.com's John Ulzheimer.
He said mortgage lenders hire outside companies to do a quick update.
"If you pay off a credit card or pay off a collection, for example, then through the process of rapid updating, they can have that information reflected within 24 to 72 hours," Ulzheimer said.
And that can make all the difference. "It can take someone who can't qualify right now and get them to that credit score level where they do qualify for a mortgage, or it might get them to the level where they qualify for a better interest rate," said Wayne Sanford with New Start Financial Corp.
Rapid re-scoring does cost money -- generally about $30 for each account, per bureau. So, an update to one card could be $90.
And it may not always improve the score enough to get the loan approved. But it worked for Davenport, not just with her mortgage, but other loans, too.
"I'm able to get better rates on other cards and other types of loans, even my car loan recently, I was able to get a very low rate because the score, my credit score is higher than it would have been," Davenport said.
True rapid re-scoring is only available through a lender or broker, so watch out for companies that market directly to consumers.


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