How You Can Use a “Rapid Rescore” to Get a Mortgage

If you’re in the market for a new home, or just looking to refinance your mortgage, you may be wondering how you can boost your credit score. This three-digit number is a big deal—it can help you get approved for financing and determine the interest rate you’ll pay on the loan.

Depending on your situation, you may have considered using a rapid rescore/ This is a technique that can raise your credit score quickly. While it’s not suitable for everyone, this approach has helped many people secure an auto loan or mortgage when they need it most.

So what is a rapid rescore? How do you update a credit report quickly? How can you tell if this technique is suited for your situation? In this article, we’ll explain everything you need to know about rapid rescore and how it works.

Let’s Talk About Your Credit History First

Before discussing rapid rescore, it’s essential to understand what a credit report is. A credit report is a file that includes details about your credit history, such as loans or credit cards you’ve opened and the payments you’ve made on those accounts. Three different agencies—Equifax, Experian, and TransUnion—collect this information and store it in your credit report.

Your payment record affects your credit score more than anything else on your report. This is why quickly paying off debts can raise your score. While most of the items in your credit report may remain there for years, charge-offs tend to stay for seven years from the date of last activity (DOALA). The same goes for bankruptcies and foreclosures which usually have to be removed after seven years from the DOALA as well.

What Is A Rapid Rescore?

Rapid rescoring is a credit report update service. It allows you to quickly revamp your credit reports, which revises your FICO score (Fair Isaac Corporation) – the number most lenders use to determine whether or not you’re eligible for a mortgage loan. Since it’s an update service, rapid rescore can only change the information that already appears on your credit reports. 

Thus, it cannot remove negative items that have already been reported or add positive information that doesn’t appear on your statement. That is why rapid rescore is not a credit repair service, and it is also not a credit restoration service. It simply helps you correct inaccurate or incomplete information about yourself, so you can get more favorable terms when applying for financing.

What Is The Process For A Rapid Rescore?

At a basic level, the rapid rescore process involves three parties: you, your mortgage broker (who must be licensed), and the credit reporting agency. 

As the borrower, you are not directly involved in the process because there is no way for you to request a rapid rescore on your own. You can only have one if your lender or mortgage broker asks for it.

The lender or mortgage broker will contact a credit reporting agency (also known as a credit bureau) and request that they update accounts with new information (e.g., proof of payment). Then, the credit reporting agency will ask for documentation demonstrating an error with prior information or that some other event has occurred since the last time they pulled your report, which would warrant a change in status for specific accounts. 

If everything checks out, they will make changes to your account(s) associated with those reports and notify you when their next regular monthly update occurs.

Use Rapid Rescore To Get A Mortgage

The most apparent use of rapid rescore is to comply with a mortgage lender’s minimum credit score requirement. Most lenders require at least a 620 on the FICO 8 scoring model, but some can go as low as 580 or even 500. Borrowers who need just a few points to reach that threshold can benefit from using rapid rescore. It could allow them to qualify for more than $100,000 in-home financing without waiting the typical 60 days for those items to be updated by the credit reporting agencies.

In addition, borrowers who are just under that threshold may be able to qualify for better interest rates and terms using rapid rescore. Since lenders often set their best mortgage rates and terms for borrowers with scores above 760 and even above 800, any extra points could earn you significant savings over the life of your loan.

Even though you might still qualify for a mortgage after filing bankruptcy or going through foreclosure, many lenders will deny your application if it’s too close in time to either event. However, by raising your credit score through rapid rescore before applying again, you may be able to convince those same lenders that you’re now eligible and ready to take on homeownership once more.

How Long Does A Rapid Rescore Take?

Rapid rescore requests are typically processed within 3 to 5 days. Still, it can vary based on how quickly the credit bureaus process them and how much time your mortgage lender gives them. The credit bureaus must process rapid rescore requests within 72 hours of receiving them. Then your mortgage lender needs to allow enough additional time for the credit bureaus to actually process the request.

How To Update Credit Report Quickly?

If you have mistakes in your credit report, you’ll want to fix them quickly. You can easily do this online with a free credit report. Get started by visiting the websites of the three major credit bureaus: Equifax, Experian, and TransUnion. From there, check your credit history to make sure everything is accurate. If there are any errors on your credit reports, contact the bureau that reported it and ask them to correct them.

It’s also vital to keep an eye on your credit utilization ratio (the rate of available credit that you’re using at any given time). A good rule of thumb is to make sure that you never use more than 20% of your available credit at once—and if possible, keep it lower than 10%. You can bring down this ratio by paying down high credit card balances or asking for a higher limit on one or more cards.

Tips To Improve Your Credit Score

A mortgage is a significant financial decision for most. While you may be excited to get started on your dream home, the details of what’s involved can be overwhelming, especially if you’re new to this kind of debt.

Here are some things that can help:

• Pay Your Bills On Time, Every Time

This means setting up automatic payments with direct deposit and ensuring they go out before the due date (aka before the payment is actually due). If you have bills from 3 different companies and all have different due dates, pay one bill early and stagger the others over the next few months so that they are not all going out at the same time.

• Pay Off Your Balance In Full Each Month

This keeps cash flow positive and avoids interest charges when trying to pay it off faster. Keep in mind that large credit card balances can take a while to clear—and they’ll still leave a negative mark on your credit score even if you pay them off in full, so plan accordingly. Keeping a low balance will also save money in interest payments over time because banks generally only charge interest on balances up to a certain amount (your credit limit).

• Reduce Your Credit Card Balance

Pay your credit card balance as much as possible each month instead of carrying a balance from month to month. Look at how much it costs versus how long it takes for the payment period to come up again (compounded interest) so that you know if it’s worth keeping for another 30 days or not! Obviously, these tactics won’t eliminate all of your debt overnight; but lowering your overall credit card balance will create room for other obligations and ultimately improve your overall credit score by making it look like you aren’t maxing out everything each month!

• Don’t Close Unused Credit Card Accounts

You may think that by closing credit card accounts, you’re reducing your debt-to-credit ratio, but what you don’t know is that it’s actually hurting you in the long run. Your FICO score considers how much available credit you have with each creditor. So if you close an account, your FICO score will get dinged for having less credit available to you than before.

How Much Does A Rapid Rescore Cost?

The cost of a rapid rescore varies by lender and bureau. In most cases, you can expect to pay between $25 and $50 per credit account you want to be updated per bureau. For example, if you have one account that needs to be updated across all three bureaus, the total cost would be between $75 and $150.

If the idea of spending hundreds of dollars on your credit score sounds absurd, consider this: for many people with a low credit score, getting approved for a mortgage can mean paying a higher interest rate or putting more money down on their new home—and those expenses can add up to thousands of dollars over the lifetime of a mortgage loan. So as obnoxious as it may seem to pay $25-$50 just so your lender can see that you paid off an old cell phone bill, it’s actually not a bad investment in the grand scheme of things.

Fortunately, some lenders offer free rapid rescores. However, they’re few and far between. If you’re working with one who doesn’t charge anything for this service (or who offers it at no extra charge), take advantage!

What Won’t Rapid Rescore Do?

While a rapid rescore can help you get the best interest rate possible on your loan, it won’t fix your credit permanently. It is a short-term solution that doesn’t work for all types of loans and will only work if you have good credit.

Moreover, rapid rescore doesn’t help with inaccurate information on your account or address fraudulent charges. If there are errors or fraud on your report, file a dispute with each of the three major credit bureaus. You should also file a police report and an identity theft report and alert the FTC (Federal Trade Commission) of any fraudulent activity on your account.

How Do Credit Bureaus Work?

Credit bureaus are used by lenders, credit card companies, and even government agencies to determine whether or not you qualify for a loan. They gather information about your payment history, assets, and how much you owe whenever they check up on you. 

Among all of this information, the credit bureaus use algorithms to create your credit score—a complicated but necessary system to make a fair representation of your overall financial health and riskiness.

Your credit score is based primarily on three numbers: 

• the amount of debt you have compared to the amount of available funds from lenders, 
• how much money do you owe compared to what you owe,
• and how often payments are made relative to other borrowers in similar situations. 

In general terms, your score will be higher if you pay off your debt regularly and have less debt than other consumers with similar scores.

What Is The Role Of FCRA In Rapid Scoring?

The Fair Credit Reporting Act (FCRA) is a federal law that regulates how credit bureaus handle, store and share your personal data. The FCRA also protects consumers by requiring credit bureaus to investigate any claims of error or fraud on your credit report. In general, the FCRA requires that the information in your credit report is accurate and current. If there are negative items in your credit reports, they can impact you for up to seven years.

In addition to protecting consumers from fraud, this law guarantees you the right to dispute any inaccurate items when they appear on your report. This allows you access to a rapid rescoring process, where you can quickly and effectively correct errors on your report quickly and effectively. If a rapid rescore can help improve your score, it may be what’s needed to get approved for that mortgage!

Conclusion

As you can see, the process of getting a mortgage can be complicated. It’s essential to be aware of your credit score and how it may affect your ability to get a loan. If your score is lower than you’d like, you can take steps to improve it. Finally, if you decide that buying a home is right for you, it’s best to work with an experienced realtor who will work hard on your behalf.

If you’re looking for help buying or selling a home, don’t hesitate to contact HOMES by ARDOR today! We offer a streamlined service for selling and buying a home, with a dedicated team of agents who don’t waste your time in the process.

Steph Wilkinson

In her 25-year career, Steph Wilkinson has been involved in the acquisition, marketing and sales of over $3 Billion dollars of residential real estate. A number of years ago, Steph transitioned into Brokerage Leadership for National real estate brands and tech start-ups. She has served as a Business Strategist for real estate agents and brokerages alike and is also a real estate coach and trainer. In her new role with the Iconic Team, Steph will be responsible for the growth of the team and will be working with all of our agents to increase their productivity and bottom line.