Your credit profile is reported to three major credit reporting agencies. They are Experian, Equifax, and Transunion. Whenever a creditor reports your credit history, they report it to the three major credit reporting agencies once per month. However, it might take between 30 and 45 days for an updated credit item to be posted on all three credit reporting agencies. If you are applying for a mortgage and you need something reported in a matter of days and cannot wait for 45 days for an updated credit report, your mortgage loan originator can do a rapid rescore by a rapid rescore vendor.
Lets take a case study where we can explain what rapid rescore is and the importance of rapid rescore. Say that you have a 615 FICO credit score and you have a debt to income ratio of 58% and need to qualify for a mortgage loan. However, your mortgage lender cannot get you a mortgage loan approval unless you had a minimum of a 620 FICO credit score and you debt to income ratio needs to be lower than 50%. Your mortgage loan originator advises you that by paying down your three maxed out credit cards to a 10% credit limit balance, your scores will surpass the 620 FICO score mark and by eliminating the minimum monthly payments on your credit cards, your debt to income ratio will be at 48% debt to income ratio. You decide to take his advise and pay off the three credit card balances right away so you can get a mortgage approval and purchase the home of your dream as soon as possible. Unfortunately, even by paying off the three credit card balances, you need to wait until the next credit reporting period by the three major credit reporting agencies before you can even start the mortgage application process which can take longer than 45 days. To avoid this lengthly delay, rapid rescore was invented.
Rapid rescore process
From the above example, the solution to this problem is done by doing a rapid rescore of your credit. You need to get the statements from the three credit card companies that you have paid the credit card balances in full. Your mortgage loan originator submits the proof to the rapid rescore vendor who in turn reports it to the three major credit reporting agencies. In a matter of 3 to 5 business days, your credit report is updated showing the paid off balances of your credit cards and also reflecting the higher credit scores. You can now proceed to process your mortgage loan application so you can close on your dream home.
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