Rapid Rescore To Update Credit To Qualify For Mortgage

This article covers Rapid Rescore To Update Credit To Qualify For Mortgage

Creditors update consumer’s credit updates once a month.

• For example, borrowers who need to pay down credit card balance in order for credit scores to go up or due to having a higher debt to income ratios and pay it on February 7th
• The credit card company will report new balance after credit cards are paid down by the end of February
• The credit report will not reflect it until the first week of March
• Updating credit report takes normally one month or more
• Can get an updated credit report in a matter of days through credit rapid rescore

Who Orders Rapid Rescore

Credit rapid rescore is used by most mortgage brokers to update or raise a lower credit score in a matter of 3 to 5 business days. Rapid Rescore is also used to correct errors on a credit report:

• A credit rescore client’s updated information is provided to a third party credit agency
• Proof of payment, proof of erroneous information data and the credit agency then, in turn, reviews the information

With the proof provided and makes the correction to the three credit reporting agencies:

• Transunion
• Experian
• Equifax

Reason For Rapid Rescore: Case Scenarios

Borrowers in the process of applying for a mortgage but have inaccuracies on credit report, may not have one to three months to wait to dispute inaccuracies with the three credit reporting agencies.

For example, here is a case scenario:

• if those who filed bankruptcy three years ago
• but the credit reporting agencies posted bankruptcy only a year ago
• this error will hinder borrowers from qualifying for a mortgage due to the inaccurate information listed on the credit report

On a case like this, credit report needs to reflect the three-year seasoning of bankruptcy even before the borrower is able to qualify for FHA Loan:

• The Automated Underwriting System will not render an approve/eligible because AUS only goes what is stated on the credit report
• Need to get bankruptcy discharge paperwork to the mortgage lender and loan officer will request a rapid rescore from a third party credit company
• The third-party credit company will, in turn, notify the three credit reporting agencies
• Provide them with the bankruptcy discharge paperwork and update the correct date of bankruptcy which is three years old instead of the inaccurate one year ago reporting date
• All this is done in a matter of 3 to 5 business days instead of months

Once the lender gets the correct information updated on the credit report, they can then proceed with the processing mortgage application.

Balance On Credit Cards

Another case scenario.

• Say borrower has 3 one thousand credit limit credit cards and balance on all of those credit cards are $900
• High balance credit cards will lower scores substantially
• Need to pay off credit cards in order to get a higher credit score in order to qualify for a mortgage or get the best available mortgage rates
• What you need to do in order for a quick fix is for the loan officer to do a rapid rescore
• Pay off all three credit cards and provide a loan officer with proof of payment
• The loan officer will provide the proof of payment and zero balance statement to the third party credit company
• The third-party credit company will contact all three credit reporting agencies
• The credit bureaus will reflect updated zero balance on the credit report in a matter of 3 to 5 days
• By doing a credit rescore, borrowers do not have to wait over a month to get an updated credit report to reflect zero balance
• It is done in a matter of 3 to 5 business days