What is rapid rescore?
A rapid rescore is a method that can raise your credit score quickly by submitting proof of positive account changes to the three major credit bureaus.
The process can lift your score by 100 points or more within days when erroneous or negative information is cleared from your credit profile.Check your home loan options today. Start here (Jan 17th, 2022)
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Raise your credit score in days, not months
When it comes to getting approved for a mortgage application, the better your credit score, the easier it is to get a mortgage loan.
Your credit score is an important factor in getting lower interest rates and favorable loan terms when buying a home.
But what if your credit score is low, or you’ve recently repaired bad credit?
The time it takes to pay down balances and fix errors can seem like an eternity before it hits your credit report. This is especially true when waiting to begin the process of qualifying for a home loan, with down payment in hand.
This is where a rapid rescore can help.Check your best interest rate. Start here (Jan 17th, 2022)
How does rapid rescore work?
Rapid rescoring is essentially what it sounds like – a rapid way to modify your credit history.
When disputing errors on your credit report, it can take creditors months to update your credit file with the major credit bureaus. Similarly, when paying down debt like credit card balances, it takes time for card issuers to report changes as well.
Loan officers use rapid rescoring to help boost a homebuyer’s credit score in a matter of days. Instead of taking months, rapid rescoring expedites the time it takes to update credit report information and issue new credit scores.
The amount of improvement to your credit report information will vary based on the types of negative items being updated, as well as the overall state of your credit history. The difference can result in a new credit score that’s increased by a few points to a hundred points.Verify your mortgage rates. Start here (Jan 17th, 2022)
Rapid rescoring is not credit repair
The program typically cannot accelerate the process of legitimate negative items falling off your credit history. Late payments, missed payments, charge–offs, collections, and bankruptcy can take years to clear.
While your mortgage lender will be able to help you with “quick fixes” – such as speeding up the time it takes to correct errors, credit recent payments, or report current information – a rapid rescore won’t be able to help with factual negative marks on your credit.
How much does rapid rescore cost?
Borrowers do not pay rapid rescoring fees, your mortgage provider does.
According to the Fair Credit Reporting Act (FCRA), borrowers cannot be charged for disputing inaccurate information on their credit reports – this provision applies to rapid rescoring fees, too.
Lenders and brokers cannot charge you for any part of the rapid rescoring costs. As such, not all providers offer this program.
The rapid rescore service can be fairly expensive. Fees can run anywhere from $25–$40 per credit file, per bureau. However, fees may also increase if the rescore is processed without complete documentation, or if the rescore needs to be rushed prior to loan approval.
There are three major credit reporting agencies, and you might want to update each credit file with all of them. So if you have four items that need to be corrected, it would be a total of 12 items included in your rapid rescore.
- 12 total updates
- $40 per update
- $480 total
Although, depending on your situation, you may only need to rescore with 1–2 of the credit reporting agencies, according to Jon Meyer, The Mortgage Reports loan expert and licensed MLO.
“Let’s say your three scores are 720, 695, and 710. If we are targeting a 720 mid, we may only need to work on the 710 credit score to get bumped up. If we are targeting 740 with the same scores above, we most likely will only need to work with the credit agencies reflecting the 720 and 710 mid–scores,” Meyer stated.
Your loan officer will be able to guide you through the process, based on your specific credit history.
Rescoring should only be done with the help of a mortgage lender or broker, not credit repair companies. Further, rapid rescoring is not a means of disputing negative information.
Step–by–step rapid rescore process
The first step in the rapid rescore process is to obtain a copy of your credit report.
You are entitled by federal law to receive a free credit report once per year from each of the major credit bureaus, Equifax, Transunion, and Experian.
You can start with a free report, but a lender will need to request your credit report themselves to order a rapid rescore.
The rescoring process will vary according to the items being updated. For instance, if scores are low due to high credit card balances, you will need to pay down the cards before requesting the updates.
Here's how a rapid rescore works:
- Determine why credit scores are low
- Find out whether the negative items are able to be corrected
- Pay down credit card balances or gather documentation proving an error
- Contact the creditor. Obtain proof of updated records
- Provide this documentation to the lender or broker
- Your loan officer orders the rapid rescore using this documentation
The lender will receive a new credit report usually within 3–7 business days.
Rapid rescores accelerate the home buying process
Without a rapid rescore, a new credit report and a new credit score could take months.
The lender often needs a higher score to issue a pre–approval letter. The buyer needs that letter in–hand to start seriously looking for a home.
Mortgage lenders often reserve lower interest rates for borrowers with good credit history. Since lower rates can save you thousands of dollars over the life of the loan, having a strong credit profile before beginning the home buying process is essential for first–time homebuyers.
Waiting for a credit score to improve by traditional methods can take a long time. The extra effort it takes to initiate a rapid rescore is well worth the weeks or months lost by taking a passive approach to raising your credit scores.
Rapid rescore FAQ
The rapid rescore service costs between $25–$40 per credit file with each of the three credit bureaus. Even if there is only a single negative item to address, the cost would be between $75 and $120. Keep in mind that homebuyers will not pay these fees – mortgage lenders shoulder the costs. Nonetheless, the borrower is still responsible for whatever costs are involved in paying down liabilities in order to rescore.
Once negative remarks have been addressed with your creditors, a rapid rescore generally takes 3–7 business days to update your credit report information and issue a new credit score.
Unfortunately, you cannot rapid rescore yourself. The rapid rescore service is only offered by lenders to homebuyers seeking approval for a mortgage loan.
Many personal finance websites recommend using this service, but Experian Boost increases your credit score for on–time payments to non–credit services including phone providers, utility companies, and select streaming services. Additionally, Experian Boost uses a different FICO credit scoring model than most mortgage lenders – so it may have no impact on qualifying for a home loan.
What are today’s mortgage rates?
Rapid rescoring is an effective way to erase incorrect information from your credit report and qualify for a mortgage.
Not sure whether you’d qualify for a home loan? You can check your eligibility with lenders using the link below. If your score is low and you could benefit from a rapid rescore, your loan officer will help you get the process started.Show me today's rates (Jan 17th, 2022)