PHILADELPHIA (CBS) -- How high is your credit score? A good credit score dictates the interest rate that you'll get for loans, or whether you'll even be approved in the first place. It can take time to get a low score higher. But there's actually a shortcut you can take if you're looking for a rapid improvement. 3 On Your Side Consumer Reporter Jim Donovan explains.
When Deborah Davenport needed to boost her credit score quickly while shopping for a mortgage, she asked a credit expert for advice. First he suggested that she pay off a credit card that she owed $500 dollars on. Since the card limit was only $700 dollars, it was ruining her credit to debt ratio, which had a direct impact on her score. Davenport says, "So by paying that $500 and now putting the card to a zero balance, it lowered my ratios."
Normally it would take 30 to 45 days for the payment to be reported to credit agencies. concerned that mortgage rates could go up, Davenport then had her lender request a rapid rescore.
So what is a rapid rescore? "I think of a rapid rescoring company as an expediter," says Adam Levin, co-founder of Credit.com. According to Levin, mortgage lenders can hire outside companies to do a quick update to your credit score. He says, "You can do in 24 to 48 hours what might have taken 30 to 45 days or more."And Wayne Sanford, of New Start Financial Corp., says that rapid rescoring can make all the difference. He says, "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."
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. She says "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."
Watch out for companies that market directly to consumers. True rapid rescoring is only available through a lender or broker, and it does cost money, generally about $30 dollars for each account for each bureau, so an update to one card could be $90 dollars.
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