Using Rapid Rescore To Raise Credit Scores And Lower DTI
This BLOG On Using Rapid Rescore To Raise Credit Scores And Lower DTI Was PUBLISHED On March 26th, 2019
Loan officers can help mortgage borrowers to raise their credit scores and lower debt to income ratios to qualify for mortgages by using rapid rescore.
- Borrowers with high credit card balances have low credit scores
- However, paying down the credit card balances to 10% credit utilization ratios will skyrocket credit scores
- For borrowers to get an updated credit report with the higher credit scores, it takes 30 to 60 days
- This long timeframe may be too long for some home buyers
- This is when using rapid rescore can expedite the process
- Using rapid rescore to raise credit scores and lower debt to income ratios is very common among lenders
- Using rapid rescore to update credit tradelines can be done as fast as 3 to 5 business days.
In this blog, we will cover using rapid rescore to qualify for mortgages.
Importance Of Credit Scores
Consumer credit scores are one of the most important factors when qualifying for a mortgage.
- Lenders have minimum credit score requirements
- To qualify for a 3.5% down payment FHA Loans, borrowers will need to meet at least a 580 credit score requirement
- Borrowers with under 580 credit scores need 10% down payment to qualify for FHA Loans
- If a home buyer with a 560 credit score does not have 10% down payment but has 3.5% down payment, they will not qualify for an FHA Loan unless they can raise their credit scores 20 points to 580
- This is when rapid rescore by lenders can help. Most experienced loan officers have a FICO Simulator which is a credit score simulator system
- Loan officers will upload consumer credit report to the simulator and the system will give an analysis on what the borrower needs to do for a credit score improvement
- The FICO Simulator will state how much to pay down on a credit card account in order to get potential credit score improvement
Once the borrower gets confirmation that he or she paid down credit cards accounts, the loan officer will contact the credit bureaus through a third party credit agency and do a rapid rescore. This process often takes 3 to 5 business days.
Other Benefits Of Using Rapid Rescore
Rapid rescore process does cost money and can get very expensive.
- Gustan Cho Associates at Loan Cabin Inc. will not ask for the rapid rescore fees upfront
- Other reasons
to using rapid rescoreis to get credit reports updated quickly - For example, let’s say that a borrower paid off a car loan but it is not reflecting on the credit report
- The borrower can get the loan officer proof of payoff and the loan officer can get the credit bureaus to update the consumer credit report in a matter of 3 to 5 days
Rapid rescores can be used to update errors on credit report as well.
Borrowers With High Debt To Income Ratios
Borrowers with higher debt to income ratios may not qualify for a mortgage unless they pay off certain credit tradelines. However, just because consumers pay off a particular creditor does not mean the creidt bureaus will instantly update their credit reports. Loan officers can do rapid rescore when a borrower pays off a particular debt to get their debt to income ratios down. Again, the rapid rescore will take three to five business days to update.
Home buyers who need to qualify for a mortgage sooner than later and need a direct lender with no overlays, please contact us at Gustan Cho Associates at Loan Cabin Inc. at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. The Gustan Cho Team at Loan Cabin Inc. are available 7 days a week, evenings, weekends, and holidays.