Equifax Credit Report Reseller
2010
Credit Re-Scoring And How It Works
Mortgagers and lenders use credit report scores to decide whether to give credit and what interest rate to charge. The higher your credit score, the lower the rate of interest you’ll be charged. So an improvement in credit scores can fetch you better interest rates. Since credit scores are based on your credit bureau report, a few adjustments to the credit report can result in increasing your scores. The process of making amendments to your credit report so as to boost credit scores and get lower interest rates is called re-scoring and it is carried out by small local credit bureaus called resellers.
Credit re-scoring was introduced mainly due to the demand from the mortgage industry. There were errors which frequently appeared in the 3 credit bureau reports that made it difficult for mortgagers to approve loans. Besides, the processing time for loans was getting shorter by the day. While loans could be processed in as little as a couple of days the errors in the credit reports would take between 30-45 days to get rectified. Now, with re-scoring credit reports are evaluated in a day’s time, modifications are made and sent to the 3 credit bureaus.
However, the 3 major credit bureaus (Equifax, Experian, Transunion) have placed restrictions on the resellers through legal contracts. These resellers are not allowed to directly approach consumers and offer their services. So, even if you contact a reseller directly, he will refuse to help you. Resellers can be approached only through lenders/mortgage brokers who can apply for re-scoring on behalf of the consumer.
Credit re-scoring can be done either by rectifying errors in the reports or by reordering revolving credit account balances to lower the balance to credit limit ratio. Alternatively, customers may be advised to clear revolving debts completely.
The re-scoring process works in a pretty simple manner. The lender/broker sends the 3 credit reports to the reseller who scrutinizes them and informs the lender/broker whether it’s advisable to make changes or whether it’s just a futile exercise. The reseller then defines a plan to modify or correct the credit reports in order to boost credit report scores. He then comes up with a list of instructions to be carried out by the consumer like getting relevant documents or clearing certain debt dues etc. This is passed on to the borrower via the broker/lender. These directions are based on the information in the credit reports, the aspired scores and the specific state-of-affairs of the borrower.
The borrower then executes the instructions by collecting important documentary evidence from collection agencies, Court etc. or even by paying off certain debts. He hands over all the pertinent documents and other evidence to the loan officer who in turn passes it on to the reseller. The reseller then makes sure that the documents are valid and legitimate and sends it to the re-score desk of the credit reporting agencies. He then ensures that the changes are reflected in the credit bureau reports. Most of the time, these changes will enhance the credit scores.
Credit re-scoring can sometimes result in a radical increase in scores that will get you lower interest rates on mortgages and other kinds of credit.
About the Author
Pamella Neely writes about starting a consignment shop including how to buy a consignment shop and how to start a consignment store.
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