Rapid Correction Services & Fico Scores

Do-it-yourself error correction for your credit report takes from 30 to 60 days. You have to gather documentation, contact the bureaus reporting the errors and wait for the bureaus to process and approve the corrections.

But what if you've found your dream home and need errors and fico scores updated fast? Sellers don't like to wait and markets are competitive with other buyers ready to pounce. Fortunately, there's a faster way to get your credit report errors corrected.

Rapid correction: especially for mortgage borrowers

Rapid correction is a specialty service offered by many mortgage brokers and some lenders. Here's how it works: You bring approved documentation for errors to your broker or lender, who sends it to the mortgage credit reporting company. That company works directly with each of the three national credit bureaus (Equifax, Experian & TransUnion) to have the errors corrected in the credit file. The process takes just 3-10 days on average.

Once corrected, an updated credit report is generated with fico scores that reflect the new data. Depending on the type of correction, a major boost in points can follow. One caveat is that fico scores are still a proprietary calculation, and no one can guarantee that any correction will raise your score. In a small number of cases, corrections can lead to a drop in the score.

Your best bet is to consult with a knowledgeable mortgage broker about the types of errors you see on your report. Some errors are more likely to improve your fico scores than others and almost never have a negative effect, like paying down your account balances to below 50%. You can even use this service to have payments you've recently made reflected on your report ahead of the normal cycle, if it will lead to higher scores and better rates.

How much?

Rapid correction services are not free. Most mortgage credit reporting companies charge by the correction and by the bureau, as that's how they are charged. That is, if one correction shows up from all three bureaus, you'll pay the fee three times. Fees run $25-$40 and up. It can get pricey if you make a lot of corrections. But the cost of a low fico credit score is much more. Even ? of a percentage point higher rate on your loan adds up to thousands of dollars over the life of the loan.

You can be selective about the errors for which you use the service, using rapid correction on only those most likely to increase your fico scores. Note that in a home loan decision, the middle score of those supplied by the three bureaus is the one that's used for underwriting purposes. Depending on your situation, a rapid correction service may be a better option than so-called credit repair, where you give a (hopefully) legitimate firm your money to make corrections.

Not many consumers know about rapid correction services. If your broker doesn't use a credit reporting company offering these services, ask him/her to use one, or find one yourself online and request a direct referral to one of their brokers in your area.