Gustan Cho The Mortgage Expert,
Publish On: February 27, 2024
This guide covers using rapid rescore in the mortgage process. What is a rapid rescore? It’s a service accessible only through your mortgage lender that allows you to update your credit report almost instantly. Correct credit report errors. Update balances after paying them off or down. Update new or increased lines of credit. Your mortgage lender can help you increase your credit score fast with rapid rescoring services. You must have written proof to support the entry you want. It only takes a few days to change your credit score using rapid rescore.
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Using Rapid Rescore Expedites Credit Score Updates
Mortgage companies can rapidly expedite updated credit information of borrowers in three to five business days with rapid rescoring. It normally takes 30 to 45 days for consumer credit information to get updated on consumer credit reports. This can become a problem when a borrower is in a hurry to qualify for a mortgage. Below is how rapid rescoring works and how it can help expedite update borrower’s credit profile:
Borrowers with high credit card balances can 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 higher credit scores, it takes 30 to 45 days. This long timeframe may be too long for some homebuyers. This is when a rapid rescore can expedite the process. Loan officers using rapid rescore can raise credit scores and lower debt-to-income ratios for their borrowers. Using rapid rescore can update credit tradelines as fast as 3 to 5 business days.
Using Rapid Rescore in the Mortgage Process
A rapid rescore in the context of mortgages refers to a process used by lenders to update credit scores for mortgage applicants quickly. When a borrower applies for a mortgage, the lender typically pulls their credit report to assess their creditworthiness. However, if errors or outdated information on the credit report negatively impact the borrower’s credit score, it could result in less favorable loan terms or even a denial of the mortgage application.
How Does Using Rapid Rescore Work in the Mortgage Process
A rapid rescore allows borrowers to update their credit reports curate information quickly. This could include paying off outstanding debts, correcting errors, or providing documentation to support positive changes in their financial situation. Once the necessary updates are made, the lender can request using rapid rescore from the credit bureaus, which can expedite updating the borrower’s credit score. Using rapid rescore can be particularly beneficial for borrowers close to qualifying for a better interest rate or loan terms but need to be held back by inaccuracies or outdated information on their credit reports. Borrowers can secure a better mortgage deal by quickly updating their credit score through a rapid rescore. However, it’s important to note that rapid rescoring typically incurs a fee, and not all lenders offer this service.
Importance of Using Rapid Rescore For Updating Credit Scores in the Mortgage Process
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 loan, borrowers will need to meet at least a 580 credit score requirement. Borrowers with under 580 credit scores need a 10% down payment to qualify for FHA loans. If a homebuyer with a 560 credit score does not have a 10% down payment but has a 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.
Using Rapid Rescore to Expedite Credit File Update
Most experienced loan officers have a FICO Simulator which is a credit score simulator system. Loan officers will upload consumer credit reports to the simulator and the system will give an analysis of 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 card 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
You can use rapid rescore are to get credit reports updated quickly. For example, let’s say that a borrower-paid off a car loan the credit report did not update. 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 three to five days. Rapid rescores can be used to correct errors on credit reports 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 credit 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. Homebuyers who need to qualify for a mortgage sooner than later and need a lender with no overlays, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.
