Rapid Re-Scoring without spending extra money to update credit report
As already mentioned, there is really scoring fee involved in this process which is approximately about $30 per item and a credit report. However, these are some ways in which you can avoid spending any further money specially in gathering the required evidence to send to the credit reporting agency for re-scoring. You should always bear in mind that these methods are a wide selection of the things that you can do, they are not necessarily applicable or targeted to your need or circumstance. You should consider each method carefully and often do take the advice of the mortgage loan officer himself as well as a certified accountant if you happen to have one.
Options for raising your credit score without spending money.
Removing Excessive inquiries
Not many people worry about the section on the credit report that lists an inquiry. An inquiry results anytime you credit report is accessed by a creditor when you allegedly applied for credit. The impact of an inquiry can be as much as 5% on your credit score. However, the impact of inquiries is not very clear on the credit report. Unless excessive and a lot of inquiries have been made in a short amount of time representing the fact that you are trying to take on a lot of credit, the impact on your credit report can be minimal.
However, if you see any inquiry that was not authorized by you, you can write to the creditor who pulled your credit report and ask the reason for doing so. In order to raise your credit score you will need a letter from someone within that company attesting to the fact that the inquiry was made in error and needs to be removed. Under certain circumstances you may even be able to convince a creditor who made an inquiry on a legitimate basis. Remember, this may be the easiest section to deal with and raising your credit score every single point is going to help in the long run.
Credit card balances
Your revolving accounts which are typically your credit card accounts have the maximum impact on your credit rating. Any negative information on your credit card account such as a late payment which was 30, 60 or even 90 days late can severely affect your credit score. Not just negative information but simply a balance being reported on a credit card can affect your credit worthiness. The first thing to consider is that the balance being reported on the credit file may be different than the actual balance on your credit card as of that day. You can fax the credit card company and get a letter faxed you stating what your balance for that day is. Just by sending this letter could make a huge difference to the credit score.
When you have a late payment being reported on your credit report, there are two possible reasons. First, it is being reported in error and you have never late on the mentioned account, secondly, you were actually rate on that account and the information is being recorded accurately.
In most circumstances it is going to be the latter reason. The fact is that a late payment on a credit card or a debt accounts such as your automobile loan or personal loan can really damage your credit score. The more recent this entry is, the more impact it will have on your credit score. Just as a reminder, the negative information on your credit report that is more recent in time impacts your credit score more than information that is old.
What you can do about the late payment being reported on your credit report is that you can write a letter to the creditor and send it by fax admitting a mistake. You should be honest direct and professional when writing the letter and try to print it on a letterhead with a professional title and designation under your name. What this letter needs to do is call on the continued customer loyalty factor in exchange for the company’s assistance. It should be noted that this method is more likely to work with a creditor with whom you have a long-term relationship. For example a bank with whom you have help banking accounts for the past several years. This method is not guaranteed to work but can in several situations. It all depends on the rest of your history with the financial institution as well as a personal relationship with any key officers.
What the letter should say just is that the you are admitting to having made a mistake with the late payment and that it was a spontaneous error and had nothing to do with your inability or unwillingness to pay the creditor. Mention how much you value your good relationship with the creditor and how you look forward to continuing association with the Bank of the financial company. Request them to kindly remove the negative payment from being reported as to the credit report as a goodwill gesture towards your continued patronage.
The only way to remove a collection account without paying them off first is to have evidence to present to the collection’s agency that the original creditor was paid. A good example is medical collection accounts that have been paid by the insurance claim. Be sure to take a firm but friendly approach when dealing with a collection agency. You need them to to get fax your letter as quickly as possible and not take their normal time to update your credit report which could take 30 to 60 days.