Building Mortgage-Ready Credit: What Is a Rapid Rescore?

Posted by Laine Smith on 9/5/16 10:53 AM

Topics: Credit Score First Time Home Buyer Preapproval home buying Mortgage Goals Mortgage Rates

Your credit score is a huge factor in mortgage approval and mortgage affordability. In terms of credit score and home financing, "rapid rescore" is a term worth knowing because it could help you out immensely as a borrower.

Mortgage-Ready-Credit-Rapid-Rescore.jpg

Image courtesy of jk1991 at FreeDigitalPhotos.net

Let's say you meet with your mortgage banker for a pre-approval and your FICO score, the median score from Experian, TransUnion and Equifax, is just shy of the credit score requirement for a mortgage or just shy of the credit score required for a lower interest rate.

Thanks to the process of "rapid rescoring", you could potentially get approved for a mortgage or the lower interest rate.

How It Works

Before you begin the rapid rescore process, your lender can run a simulation to estimate how much your credit score could improve by taking certain actions, such as paying down a balance on a credit card.

After you, the borrower, have taken the actions suggested in regards to your credit score, your corrected or updated information is verified by your mortgage lender's credit reporting entity and then submitted to the credit bureaus.

This is when the "rapid" part of "rapid rescore" comes into play. With the new information, your credit report is updated within a few days and your lender can request an updated credit score.

Without a rapid rescore, it takes much longer for updated or corrected information to show up on a consumer's credit report.

What a Rapid Rescore Isn't

Don't get a rapid rescore confused with credit repair services. It doesn't remove accurate mistakes like late payments or bankruptcy. Mortgage lenders use the tool of rapid rescoring in certain circumstances to accurately depict a borrower's creditworthiness.

How a Rapid Rescore Could Help You

An increase in just a few points can mean the difference between getting a better rate or getting a mortgage at all. Getting a better mortgage interest rate can result in substantial savings and increase your overall mortgage affordability.

Overall, if you're planning to buy a home and want your credit score to be at its highest, there are ways to improve your score without a rapid rescore. Keeping balances low, making on-time payments, and having a healthy mix of credit types are just a few of the ways to maintain and increase a healthy credit score.

If you're interested in how your credit score affects your mortgage affordability, download our free Mortgage 101 Handbook for everything you need to know about home buying and financing.

Download: Mortgage 101 Handbook

Get Pre-Approved

 

Subscribe to Email Updates

Posts by Topic

see all