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What Is Rapid Rescoring?
Rapid rescoring is a quick process of getting your score updated asap.. You work in conjunction with your lender or credit counseling service to correct any errors on your credit report. This can be an effective way to improve your score quickly because it removes any negative information that may be dragging it down.
Rapid rescoring is not something that you can do on your own. Rapid rescoring is typically offered by lenders when you are applying for a mortgage. They have an internal expedited process that can update your score within a few days, vs the traditional timeframe of a credit dispute or paying off a balance.
- Submit your payment to the creditor
- Wait on the creditor to post the payment
- Wait on the creditor to report the payment to the credit bureaus
- Credit bureaus must then update your credit profile to reflect the payment
While we know that some of this is automated and will update, oftentimes there is a lag period in reporting your credit information. You may be in a situation where you don’t have 30 days. This is where rapid rescoring can help. Your lender can get this info updated in a matter of days.
Planning Ahead
Before you even start the loan process you need to do the following:
To get started, you’ll need to order a copy of your credit report from the major credit bureaus. Review the report carefully and look for any inaccuracies. If you see anything that needs to be corrected, contact the creditor or lender directly and ask them to fix the error.
Once the errors have been corrected, your credit score should start to rise. Keep in mind that it may take a few weeks or even longer for the corrections to show up on your report. But if you stick with it and keep monitoring your score, you should see a good improvement over time.
Should You Use Rapid Rescoring?
If you have poor credit, you may be familiar with the term “rapid rescoring.” This is a process that can be used to quickly raise your credit score. Rapid rescoring is often used by people who are trying to qualify for a loan or mortgage. As a real estate broker in Georgia, I have had plenty of clients go through the rapid rescoring process in order to qualify for a mortgage.
Rapid rescoring is different than your traditional credit dispute as you will need the help of your lender to submit for a rescore. Although rapid rescoring can be beneficial, it’s important to understand the risks involved. In some cases, rapid rescoring can actually lower your credit score. It’s also important to understand that rapid rescoring is not a permanent solution to improving your credit score. Long-term, consistent good habits of paying your bills on time and keeping low balances will sustain your credit score.
If you’re considering rapid rescoring, this article will give you everything you need to know. We’ll explain how rapid rescoring works, the pros and cons, and how to use it yourself. When you finish this article, you’ll have a clear understanding of how rapid rescoring works and will be able to decide if you need it.
How Can Rapid Rescoring Help Your Credit Score?
If you have recently paid off a debt or made another positive change to your credit history, you can use rapid rescoring to have your credit score updated more quickly. Rapid rescoring is best suited for individuals that may be within a few points of qualifying.
If your lender says that you need 5 point increase to qualify for your loan, then you should consider rapid rescoring. If you need 100 points then it may not be for you. However, all lenders run simulations that will determine exactly what you may need to pay off or pay down in order to increase your overall score.
Rapid Rescoring Scenarios
Let’s take a quick look at a scenario of how a rapid rescore can have a positive impact on your credit score.
Let’s assume that your credit score is 630.
It’s not a bad score and if you were using the NACA program for your loan, your score wouldn’t matter at all. Your lender advises you that you need a 640 middle score in order to qualify for the Chenoa Loan program. In order to qualify for the program, you need to increase your score by 10 points. If you don’t increase your score, you will not qualify for the loan. Paying down the balances on your credit cards may give you the boost you need. Keep in mind that your lender will advise you on what you should pay off.
Second scenario. You have a 580 Credit Score and you will need to put down 10% on a $225,000 home loan, and your rate will also be 5%. You will need $22,500 for your downpayment and your monthly payment would be $1,301 – $1,087 Principle & Interest, $148 Property Tax, and $66 Homeowner’s insurance. However, by increasing your score to 620, you will now only need to put down 3.5%. This drops your downpayment to $7,875. Right out the gate on the front end of your loan, you have saved $14,625.
Improving your credit score does matter and will impact you in a positive manner. Easy peasy!
What Are The Benefits Of Rapid Rescoring?
Rapid rescoring can help you to achieve a mortgage loan when you may only be a few points away.
There are many benefits to rapid rescoring, including:
-You may be able to qualify for a better interest rate on your loan
-You may be able to get approved for a loan that you were previously denied
-You may be able to get a higher credit limit
-It can help improve your credit history
If you are thinking about using rapid rescoring to improve your credit score, be sure to talk to your lender first to see if it is an option for you.
How Long Does It Take To Get A Rapid Rescore?
The timeframe for a rapid rescore can vary depending on the lender. Typical timeframes are 48 to 72 hours. I would plan for no longer than seven days at the max to see an updated score.
Follow up with your lender to obtain specific timeframes.
How Much Does Rapid Rescoring Cost?
Rapid rescoring is free. I’m not away of any lenders that charge for rapid rescoring and if they are charging it is a violation of the Fair Credit Reporting Act (FCRA). Under the FCRA, mortgage lenders are prohibited from charging consumers for rapid rescoring. The reality is that you are paying for it in some capacity via admin fees etc, through the lender.
The Bottom Line On Rapid Rescoring
While rapid rescoring can be effective, it’s important to keep in mind that it’s not a guarantee. You may see a small increase in your score, or your score may not change at all. Sending too many disputes can certainly result in negative consequences. Try to remember what you’re hoping to get from credit repair and refrain from being too aggressive with your requests. The bottom line is that you should always keep your expectations realistic when it comes to credit repair.
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About The Author
Marvette Critney
Marvette Critney is a Real Estate Broker in Metro Atlanta, GA, a Credit Expert, and the founder of 750 Credit Score Blog Resource Site, and the well-known blog site Brag Differently. Her credit advice and knowledge have helped hundreds to become homeowners. She is recognized as a leader in her field. Read more.