Rapid Rescore During Mortgage Process And How It Works

Gustan Cho Associates

This BLOG On Rapid Rescore During Mortgage Process And How It Works Was UPDATED And PUBLISHED On April 9th, 2020

Consumer credit profile is reported to three major credit reporting agencies.

  • They are Experian, Equifax, and Transunion
  • Whenever a creditor reports 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
  • Borrowers who are applying for a mortgage and need something reported in a matter of days and cannot wait for 45 days for an updated credit report, their mortgage loan originator can do a rapid rescore by a rapid rescore vendor

In this article, we will discuss and cover Rapid Rescore During Mortgage Process And How It Works.

Rapid Rescore During Mortgage Process
The Gustan Cho Team

Rapid Rescore During Mortgage Process Prior To Pre-Approval

Let’s take a case study where we can explain what rapid rescore during mortgage process is and the importance of rapid rescore.

  • Say that if a borrower has a 615 FICO credit score and a debt to income ratio of 58% and need to qualify for a mortgage loan
  • However, lenders cannot get a mortgage loan approval on conventional loans unless the borrower has a minimum of a 620 FICO credit score and debt to income ratio needs to be lower than 50%
  • The mortgage loan originator advises borrowers to do the following:
    • that by paying down their three maxed out credit cards to a 10% credit limit balance
    • scores will surpass the 620 FICO score mark
    • by eliminating the minimum monthly payments on your credit cards, their debt to income ratio will be at 48% debt to income ratio
  • Borrowers decide to take his advise and pay off the three credit card balances right away so you can get mortgage approval and purchase the home of their dream as soon as possible
  • Unfortunately, even by paying off the three credit card balances, borrowers need to wait until the next credit reporting period by the three major credit reporting agencies before they can even start the mortgage application process which can take longer than 45 days
  • To avoid this lengthy delay, rapid rescore can be done

A Rapid Rescore will update the consumer credit report in 3 to 5 business days.

Rapid Rescore To Expedite Credit Updates

From the above example, the solution to this problem is done by doing a rapid rescore of credit.

  • Borrowers need to get the statements from the three credit card companies that they have paid the credit card balances in full
  • The 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, credit report is updated showing the paid off balances of credit cards
  • Rapid rescores also reflect the higher credit scores
  • Borrowers can now proceed to process their mortgage loan application so borrowers can close on dream home

Home Buyers who need to qualify for FHA, VA, USDA, Conventional Loans with no lender overlays, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

Related> What Is A Rapid Rescore

Related> Update Your Credit With Rapid Rescore

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