Risk Score RE-DO: Your Questions, Asked and Answered

 

I’d like to take this opportunity to address some of the questions that I frequently receive regarding the Risk Score RE-DO program.

Is the change permanent?
Yes. The change is made at the bureaus by the bureaus. It is permanent to the extent that the creditor has made the changes in their system that they indicated they made in the documentation. If a creditor fails to make the change in their system, there is a chance that the next time that creditor issues a report to the bureau, the changes made by re-scoring will be overwritten. This has happened; fortunately it is not very common.

 

My borrower is having trouble getting documentation that meets the bureaus requirements.
What can my FDR do?


Unfortunately, if the creditor will not cooperate, FDR will not be able to submit your borrower through the Risk Score RE-DO program. The borrower has several options. They can wait until the change arrives at the bureau from the creditor or file their own dispute with the bureaus either in writing or through the bureau’s jointly owned website, www.annualcreditreport.com

Is the score guaranteed to go up?


No. There are variables that FDR cannot control, such as another creditor reporting something that adversely affects the score. And while FDR strives to offer excellent advice, the FICO scoring matrix is never going to be shared with anyone so that the exact algorithms are known.

 

 

Are the bureaus required to make the corrections submitted to them?


No. The bureaus reserve the right to reject any documentation that they feel does not meet their requirements. Vague comments such as “valued customer” and “account is in good standing” are a sure way to get a submission rejected. Even documentation that meets the bureaus’ basic requirements is subject to verification. One of the bureaus verifies every single document submitted to them with the original creditor. If the creditor refuses to verify, then the bureau will reject the change. The second requires that the credit-reporting agency verify that every document submitted is legitimate. The third spot checks various documents. All is done in an effort to weed out fraudulent documents.

 

If it doesn’t work do I have to pay for the process?


Unfortunately, yes. The bureaus are going to bill FDR for whatever changes are made. The bureaus have no idea if the change being requested will make the score higher or lower. And FDR is going to bill you. Remember, there are no guarantees made by either the bureaus or your FDR that the process will work.

I want to help a borrower over the course of time instead of using the Risk Score RE-DO service.
What advice can I give them?


Here is my general advice for everyone. The ideal credit file has two, maybe three, active credit cards and at least one installment loan. If you have more credit cards, select the oldest two or three and pay the rest down to zero. Don’t close the extra cards, simply let them go inactive. Try to keep the balances on the active cards to less than 50% maxed, less than 30% if possible. Bring any delinquent accounts current and keep them that way. Don’t apply for any unnecessary credit as the inquiry, and the addition of a new account, can have a detrimental affect. Visit www.annualcreditreport.com to view credit reports and dispute anything inaccurate. Tell your clients to follow this advice and come back in four to six months.