How Does Rapid Rescore During Mortgage Process Work?

This BLOG On Rapid Rescore During Mortgage Process Was UPDATED On August 25, 2017

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.

Rapid Rescore During Pre-Approval Process

Lets take a case study where we can explain what rapid rescore 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,  mortgage lender cannot get a mortgage loan approval unless 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 that by paying down their three maxed out credit cards to a 10% credit limit balance, scores will surpass the 620 FICO score mark and 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 a 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 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 and also reflecting 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 The Gustan Cho Team at USA Mortgage at 1-800-900-8569 or text us at 262-716-8151 for 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

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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