Rescoring: The Little Known Credit Secret

If you have paid your bills on time but your credit report says you haven't, your Princeton Capital Loan Consultant might have a trick to fix your report fast. Typically, the three credit bureaus each require at least 30 days investigating and making changes to your credit report. But if you are in the process of applying for a mortgage, you might be able to get the changes made in just a few days. This 'trick' is called rescoring, according to Evan Hendricks, author of "Credit Scores and Credit Reports: How the System Really Works." Rescoring is a service offered only to mortgage lenders by independent credit reporting agencies, which compile information from the three credit bureaus (Equifax, Experian, and TransUnion). The independents can work with the Big Three, fix errors, and then recalculate your credit score. If your score goes up after the errors are fixed, you could save thousands of dollars on your mortgage interest. The key is that rescoring works only  on real errors. If you have a low score because you don't pay your bills  on time, then you can't rescore. You must demonstrate that you have a legitimate error on your report and provide proof, such as payment records. If you have a legitimate case, you may have to pay up to $150 to have the rescoring done. Rescoring is an emergency maneuver.  If you are planning to apply for a mortgage, you should call your loan consultant and get a copy of your credit  report first to avoid last minute problems. There has been a lot of talk about adjustable rate mortgages, sub prime loans, and the like and you might be wondering if it is actually hazardous to buy a home! But nothing could be further from the truth. Remember that more than 97 percent of homeowners pay their mortgages on time. Buying a home is still the greatest route to financial security. The rules of smart home buying haven't changed. Simply put: Buy a home you can comfortably afford right now. The first step is to get a loan with a good interest rate. To do that, pay your bills on time to create a good credit rating. Next, save some money so you can make a down payment on your new home. The down payment combined with a good credit rating will give you an affordable interest rate and start you off with a little equity in your new home. Equity is the best insurance you can have against unforeseen events. If you want to buy a home in the next two years, don't get yourself in a lot of debt with things like big new car loans. If you can start off buying a home within that framework, you are doing the smartest possible thing. If you are buying what you believe to be your permanent home, a fixed rate mortgage is best.

You can still buy a home if your credit isn't perfect or if you have new car payments or if you don't have a big down payment, but investors are tightening their rules and you may have a higher interest rate. Still, if you finance a house that you can comfortably afford right now, you will be making a wise move.

With all the mortgage news recently, you might be tempted to think there is a problem with the Great America Dream of home-ownership.  You might hear that mortgage delinquencies are up. Foreclosures are up, and so forth. But here is some good news for you: A whopping 97 percent of all homeowners are not in foreclosure and they are paying their mortgage on time. That's good news for home-ownership, and it means that you can be the king of your own castle. Ready to reign? Call us today!