Overview
Identify the differences between Merge Plus Credit Supplement and Rapid Recheck/Rescore to help you select the appropriate service for updating or verifying borrower credit information.
A Merge Plus Credit Supplement is used to correct, clarify, or add information to supplement a credit report. Loan underwriters or processors typically request a supplement when additional documentation or verification is needed. It’s good to know the following:
Does not update the borrower’s report data with the credit bureaus, unlike Rapid Recheck.
Cannot be reissued for automated underwriting.
Most orders are often processed within two business days. If multiple updates are needed, additional conference calls and processing time may be required.
Requires a Borrower’s Authorization, allowing Cotality Credco to contact creditors on the borrower’s behalf to obtain updated information.
Common uses
Bringing an account current
If a borrower has made payments, but the tradeline still shows as delinquent a Merge Plus can verify with the creditor and update the status.Verifying an account is paid off
When a loan or credit card has been fully paid but still appears open or with a balance, a Merge Plus can confirm pay off and update the payment.Adding context to existing items
As an example, noting a formal payment plan that isn’t shown in the report.Incorporating alternative credit data
Such as rent or utility payments, to demonstrate financial responsibility.
How the process works
Automated call
Cotality Credco uses an automated phone system from the creditor to obtain current account information.Conference call
Sometimes, a three-way conference call is set up between the applicant(s), creditor, and Credco so that the creditor receives borrower authorization to verify account information. This is usually required when the creditor does not offer an automated phone system.Documentation
Cotality Credco works with the creditors to obtain updated and accurate account information and applies the new information to the supplement report.
Example
A borrower’s student loans are incorrectly reported as active instead of deferred, which inflates their debt-to-income ratio.
The lender requests a Merge Plus Credit Supplement. Cotality Credco sets up a conference call with the student loan provider and the borrower to receive updated information.
The error is corrected on the supplemental report, lowering the borrower’s DTI and improving loan qualification eligibility
A Rapid Recheck/Rescore is used to expedite verified updates to a borrower’s credit report and obtain a refreshed credit score. Lenders typically request a rescore when recent changes, such as paying down a balance or correcting inaccurate information, need to be reflected more quickly than through the normal credit reporting cycle, which can take 30 to 45 days. It’s good to know the following:
Helps expedite verified credit report updates that may otherwise take longer to appear through the normal reporting cycle.
Can be used when recent credit changes may affect a borrower’s qualification or loan terms.
Updated information may be reflected in as little as three to five business days.
A refreshed credit score reflects the updated information, but a score increase is not guaranteed.
How the process works
Borrower action
The borrower takes steps to update their credit information, such as paying down balances or providing a letter of dispute removal.Lender submission
The lender submits the Rapid Recheck/Rescore request with supporting documentation. Rapid Recheck is available only to mortgage lenders and cannot be requested directly by borrowers. In some cases, a rescore can be completed without supporting documentation.Bureau update
Once the information is verified, the credit bureaus update the borrower’s credit file. A new credit report is then generated and provided to the lender to evaluate the borrower’s eligibility.
Example
A borrower enters escrow on a home with a 21-day closing timeline. The borrower’s initial credit score is 692, just below the 700 threshold needed to qualify for a lower interest rate.
The lender advises the borrower to pay down credit balances.
After the borrower pays down the balances, the lender requests a Rapid Recheck and provides supporting documentation.
Within three to five business days, the credit bureaus update the borrower’s credit file. The refreshed credit score increases to 702, allowing the borrower to qualify for a more favorable interest rate.
Use the following comparison to understand the key differences between Merge Plus Credit Supplement and Rapid Recheck/Rescore.
Merge Plus Credit Supplement | Rapid Recheck/Rescore | |
|---|---|---|
Credit Updates at the Bureau | No | Yes |
Scores Recalculated | No | Yes |
Manual Credit Verification | Yes | No |
Available Platform | Encompass & Credco.com | Credco.com |
Outcome
You can identify the differences between Merge Plus Credit Supplement and Rapid Recheck/Rescore and understand when each option may be appropriate for your lending needs.