When shopping for a home loan, your credit score is the first and also the most important factor that is considered by lenders when evaluating a loan application.
Credit score requirements for many types of mortgages have increased substantially over the last year.
And having a credit score that's less than excellent can lead to a higher interest rate for many types of loans, not just mortgages.
So what happens if you find yourself in a situation where your credit score is either too low to qualify for a loan or is too low to get the rate that you would like? One option is to see if your mortgage lender has the ability to do a "rapid rescore".
The rapid rescoring process is a special service offered by some lenders that allows them to circumvent the normal 30 to 60 day waiting period that it takes to update information with the credit bureaus.
To do this, lenders must have very specific documentation from the creditor that states specifically what information is to be corrected.
Here are some common examples of situations that may qualify for a rapid rescore: 1 Change in status of an account, such as paid as agreed.
This is common for collection accounts.
2 Change in the balance of an account, such as a credit card, that may raise the score.
3 Deletion of derogatory information, such as late payments.
4 Deletion of accounts that were reported in error, such as instances of fraud, identity theft or a computer error.
As stated before, solid documentation from the creditor is required in order to perform the rapid rescore process.
Receipts, cancelled checks and dispute letters do not qualify.
All information submitted is usually verified by the credit bureaus as well, so false or unverifiable information will not be considered.
Rapid rescoring is also quite expensive, so most lenders will not use the service unless they are very sure the result will increase the score to an acceptable level.
Many lenders also have access to tools such as a Credit Score Analyzer or a Credit "What-If" Simulator, which may show the expected result of making changes to accounts.
Once the documentation is forwarded to the credit bureaus, the process normally takes about five business days to complete.
Once the bureaus have updated the information, the lender is contacted to repull a new credit report.
If any additional information has changed on any other accounts in between the time the initial and final credit report was pulled, this may affect the total outcome of the credit score.
For this reason, rapid rescores do not always produce the intended result.
But if there's no other solution and you're pressed for time, your only option may be a rapid rescore.
Credit score requirements for many types of mortgages have increased substantially over the last year.
And having a credit score that's less than excellent can lead to a higher interest rate for many types of loans, not just mortgages.
So what happens if you find yourself in a situation where your credit score is either too low to qualify for a loan or is too low to get the rate that you would like? One option is to see if your mortgage lender has the ability to do a "rapid rescore".
The rapid rescoring process is a special service offered by some lenders that allows them to circumvent the normal 30 to 60 day waiting period that it takes to update information with the credit bureaus.
To do this, lenders must have very specific documentation from the creditor that states specifically what information is to be corrected.
Here are some common examples of situations that may qualify for a rapid rescore: 1 Change in status of an account, such as paid as agreed.
This is common for collection accounts.
2 Change in the balance of an account, such as a credit card, that may raise the score.
3 Deletion of derogatory information, such as late payments.
4 Deletion of accounts that were reported in error, such as instances of fraud, identity theft or a computer error.
As stated before, solid documentation from the creditor is required in order to perform the rapid rescore process.
Receipts, cancelled checks and dispute letters do not qualify.
All information submitted is usually verified by the credit bureaus as well, so false or unverifiable information will not be considered.
Rapid rescoring is also quite expensive, so most lenders will not use the service unless they are very sure the result will increase the score to an acceptable level.
Many lenders also have access to tools such as a Credit Score Analyzer or a Credit "What-If" Simulator, which may show the expected result of making changes to accounts.
Once the documentation is forwarded to the credit bureaus, the process normally takes about five business days to complete.
Once the bureaus have updated the information, the lender is contacted to repull a new credit report.
If any additional information has changed on any other accounts in between the time the initial and final credit report was pulled, this may affect the total outcome of the credit score.
For this reason, rapid rescores do not always produce the intended result.
But if there's no other solution and you're pressed for time, your only option may be a rapid rescore.
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