Give your credit scores a boost to get a mortgage loan by having errors corrected, account balances reduced or new information added to your credit files immediately through rapid rescoring.
Rapid rescore is a method of fixing or updating credit information fast to help you qualify for a mortgage loan or get a better interest rate.
How Rapid Rescoring Works
Rapid rescoring can bump your score by 100 points or more as positive information is added to your credit file and negative information is removed or updated in as little as 72 hours.
Unlike credit repair companies that can take months to fix your credit, rapid rescore is a fast, lender-initiated review of your credit based on documented inaccuracies, correcting errors, recent debt payoffs or paying down high credit card account balances.
Because your lender is doing the submitting, updates get fast-tracked. This process can quickly improve credit scores so borrowers can qualify for a mortgage loan or save money by getting a better interest rate.
Here is an example of how lenders can offer rapid rescoring to accelerate credit score updates:
- The lender identifies negative items on the borrower’s credit report that could be improved.
- The borrower takes action to address these issues (e.g., paying off a debt).
- The lender provides documentation of the changes to the credit bureau and pays a fee for expedited processing.
- The credit report is updated, and new credit scores are calculated.
Let’s say your score is 620 and your mortgage broker suggests a 640 score puts you in a better position for approval with a better rate.
Getting you to a higher score may occur by reducing your credit utilization, which by the way accounts for 30% of your credit score.
Paying off or reducing credit cards balances could quickly boost your score to secure a better interest rate.
NOTE: Not all lenders offer this service, so you will need to check with your specific lender.
Benefits of Rapid Rescoring
One major benefit of rapid rescore is saving money. A score improvement due to rapid rescore can qualify you for a lower interest rate, saving you a significant amount of money over the life of the loan.
For example, even a small increase in your credit score can lead to a lower interest rate, which translates to lower monthly payments and potentially thousands of dollars saved over the loan term.
Types of Credit Information to Rescore
Any negative information can be corrected as long as you have documentation to support a change. That negative information can include:
Late Payments. Let’s say you have a few credit card or loan payments reporting a 30, 60 or 90 days late. Late payments have the greatest impact on your credit score as payment history accounts for 35% of your overall credit score.
If you can prove you have not paid late; that information can be corrected and your credit score immediately updated to reflect the change.
You can also request a goodwill removal of late payments from your creditor. If you get an agreement in writing that information can be submitted to rapid rescore your credit files.
Collection Accounts. Another example would be new information from a collection agency. You may be able to get a collection agency to agree to delete an account in exchange for payment. If you have documentation to support that agreement, it can be submitted to a rapid scoring service and your credit scores updated immediately to reflect that change.
Even if you have recently paid a collection and the status has not updated, rapid re-scoring can quickly update the paid status.
High Balance Credit Card Accounts. The most common rapid re-scoring involves paying down current account balances.
Many credit experts advise keeping your credit balances to no more than 10 percent of your available credit limit. This means if you have a credit card with a credit limit of $5000 your balance should be no more than $500.
In fact, FICO suggests consumers with the best credit scores use no more than 7 percent of their available credit. By providing proof you have paid down a credit card balance, a lender can have your credit files rapid rescored to reflect whatever increase in credit scores you may experience.
Bankruptcy. It is not uncommon for consumers who filed bankruptcy to have their credit reports reflect accounts unpaid that were actually included in the bankruptcy.
This can make a big difference in your credit score if an account is showing unpaid as opposed to “included in bankruptcy.”
How Credit Scores Increase
Rapid re-scoring immediately connects your credit information, your creditors and the three major credit bureaus together to get problems fixed immediately; something the credit dispute process can’t do in such a short time.
Cost of Rapid Rescore
Rapid rescoring is a fee-based service and varies depending on the company. You can request rapid rescoring from your loan officer or mortgage broker, they should be familiar with the service.
Consumers can also request rapid rescoring from companies like rapidrescore.com, but it’s rather expensive.
Rapid rescore is an invaluable tool that can make a significant difference in the process of qualifying for a mortgage loan.
Keep in mind that there’s no guarantee that a rapid rescore will boost your credit scores, but I think the money borrowers can save with a lower interest rate is worth a try.