What Is Credit Rescore? How Does It Help You?

If you haven't checked your credit report months before applying for a home loan you may be in for an unfortunate shock when you visit a loan officer.

 

A host of problems could pop up. For example, your credit score could be a little too low to qualify for the best rate on a mortgage or you will see the impact of using a high percentage of your credit. Sometimes there are errors on your credit report, such as credit card payment that you sent on time is shown by the creditor as arriving late or there is a a credit card on your report that belongs to someone with a name similar to yours.

 

A rapid rescore can help if you’re in the middle of the process of buying a house. And it can help with a quick mortgage approval, having a days-long turnaround instead of a month if the issues can be resolved quickly.

 

How Rapid Rescoring Works

 

A rapid rescore is a process done by a lender or mortgage broker to quickly fix credit report errors that can hurt a credit score. It’s a process that can only be done by a lender or a company that specializes in rapid rescoring and has access to credit reporting company data that is pulled from credit bureaus.

 

Rapid rescoring takes 3-5 business days, while consumers who try to improve their credit score by contacting a credit company can spend 30-45 days fixing their credit score. Sometimes it takes that long because a credit service legally has 30 days to respond to a request, which is what they normally take with requests from individuals.

 

A rapid rescore can raise a credit score by 100 points or more within a few days, but that’s only if the negative information can be cleared from your credit profile quickly.

 

For example, paying a credit card down so that a credit utilization ratio—your outstanding balances compared to your credit limits—is less than 30 percent, can boost a credit score by 10 points or more. That could be enough to increase a 715 credit score to 725, where a 720 score is the cutoff to get a lower interest rate on a loan.

 

Fixing credit report inaccuracies is another reason to use a rapid rescore.

 

Having proof that a payment was made on time, for example, when a bank says it wasn’t could be an error worth fixing.

 

Costs of Rapid Rescoring

 

The Fair Credit Reporting Act doesn’t allow borrowers to be charged for disputing inaccurate information on their credit report. Rapid rescoring fees are paid by the lender and can cost $20 to $40 per credit account that’s being checked by each credit bureau.

 

Updating the three major credit bureaus for three or four credit accounts can get expensive. Some lenders may average all three credit scores, while others may just use one credit bureau’s score.

 

Or, if you want to do it yourself, you can obtain a free copy of your credit report once per year from each of the three major credit bureaus: Equifax, Transunion and Experian. If done a month or more before applying for a home loan, it will give you enough time to review the reports and fix any errors.

 

If you want the names of some lenders to talk with, I am glad to refer you to several.  At least one of my lenders says he does a credit rescore about 25% of the time - even with well qualified clients.  Getting someone above the threshold for a better loan rate can save thousands of dollars over several years - for just a little work at the moment.  Be sure to ask your lender if he or she goes that extra mile for you. 

If you are looking for a home in the DC metro area, you know there is more to the process than just picking a property and making an offer. You need to find the best location for your wants and needs, get a great price, and work with a lender who will make your life easier - not harder.  Trust your search with a Realtor who is licensed in DC, MD and VA and really knows the city and all its secret neighborhoods.

Start your search with the Lise Howe Group, Washington Natives who love the city and all its quirkiness! If you are moving or relocating to Washington DC, be sure to ask for our relocation guide. Call us at 240-401-5577 to schedule an appointment or email us at lise@lisehowe.com.  Too excited to wait to talk to us about a great home? Just click here to start that home search.

If you want to see what is for sale in Washington DC, Chevy Chase and Bethesda, check out these links below:

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Luxury Single Family Washington DC Homes

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Washington DC Condos

 

Lise Howe

Keller Williams Capital Properties

4646 40th St NW 

Washington DC 20016

240-401-5577 (24 hour direct)
Licensed in DC, MD, and VA
Associate Broker, GRI, ABR, CRS
The Lise Howe Group
Howe Real Estate Should Be!
www.lisehowegroup.com

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