Rapid Credit Rescoring After Bankruptcy
Your credit score plays a major role in deciding your financial future. Any time you apply for a loan, whether it’s a personal loan, a car loan, or a mortgage on a new home, your credit score will determine not only the interest rate you might receive, but whether or not the lender is even willing to work with you.
What is Rapid Credit Rescoring?
Most people know that sometimes a credit report can contain inaccuracies. Accounts that were not reported properly or have not been updated can sit on your credit report, lowering your score and affecting how you appear to potential lenders. This inconvenient but common scenario has given rise to “rapid credit rescoring” services, which are designed to run through your credit report in as little as 72 hours, correcting errors to present a more accurate picture.
Rescoring After a Bankruptcy
If you’ve gone through a bankruptcy, you probably know that your credit score is going to be fairly low afterwards; while the bankruptcy provides you with a clean slate, it also does a number on your credit report and makes you ineligible for many types of loans. With this in mind, many people are tempted to try rapid rescoring services after a bankruptcy in order to improve their scores – particularly if they’re planning to attempt a large purchase in the future, such as a home or vehicle.
Stop right there. The truth is that a rapid rescoring service may not be worth the cost in this type of situation.
- There’s a common misconception that rapid rescoring will raise your credit score no matter what, and that simply isn’t true.
- The rescoring will not change any negative aspects of your credit report that are accurate – such as your bankruptcy.
- Nor will it automatically result in a higher score, not even if negative items are removed.
The sole purpose of a rapid rescoring is to quickly remove inaccurate negative items and recalculate your score so that your true number is presented to your lenders. If your bankruptcy is the only thing lowering your score, a rapid rescoring won’t change it for you.
In fact, credit experts say that rapid rescoring hasn't worked for many of their clients. So think carefully before you plunk down a bunch of money.
A Rescore Might Be the Answer If...
Of course, there is an exception to this general rule: if you’ve gone through a bankruptcy and used it to wipe out some old debts and those debts are still lingering on your credit report, then a rescore may be in order.
- If, for example, you wrote off a credit card in your bankruptcy and it is still presenting itself as a bad debt on your report, then a rescoring would correct the error and show the credit card as having been eliminated by the bankruptcy.
- This could, in turn, raise your score, although it’s not guaranteed to do so. Remember,the bankruptcy is still on your credit report. The bad debt will be too -- but it will now say that it's been discharged in bankruptcy.
- If you find yourself with this type of situation on your hands, and you’re looking at a major loan application in the near future, you may want to consider a rapid rescoring service.
Watch Out for Companies That Market to Consumers
True rapid rescoring is only available if requested by a lender or broker. You can't do it yourself. So if a company is marketing rapid rescore directly to you, watch out. It's probably not legitimate.
You Can Fix Your Credit Report Yourself
Keep in mind, too, that you can correct inaccurate information on your credit report yourself, for free, by writing to the credit bureaus and asking them to examine the items in question. The process takes time, certainly more than 72 hours, so it’s not the ideal solution if you’re in a crunch. To learn more about rebuilding your credit after bankruptcy, see our article Life After Bankruptcy: Checklist for a Fresh Start.