Your credit score is a major factor in determining your interest rate on a mortgage, and even a small rate decrease can save you thousands of dollars over the life of the loan.
Typically, raising your credit score would take months. But with rapid rescoring, you can achieve your goal in just a few days.
Rapid rescoring is a service that mortgage lenders provide to homebuyers whose credit scores might need just a little bump. It’s not a cure-all, however. There are some limitations to consider before you request it, and it likely won’t have the same effect as the months of work it usually takes to improve your credit.
Lenders use rapid rescoring predominantly for mortgage loans because they are more time sensitive than other loans. Plus, even a small increase in a mortgage interest rate can cost the borrower thousands of dollars in interest over the life of the loan.
How Does a Rapid Rescore Work?
Maybe you’ve updated some important financial information already but the changes haven’t been reflected on your credit report yet. Maybe you want to pay down enough debt in order to qualify for a lower rate, or you’ve disputed incorrect information on your credit report.
Since positive movement generally takes several weeks to appear on your credit report, you then get a rapid rescore done. Those new items will quickly show up on your credit history (and ideally, give you a new credit score as well).
5 Steps of the Rescore Process
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. The general procedure is as follows:
- Determine why credit scores are low
- Find out whether the 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.
- The lender orders the rapid rescore using this documentation
When Should You Consider a Rapid Rescore?
There are downsides to consider before requesting a rapid rescore. A rapid rescore also isn’t a silver bullet to fix your credit.
Other long-term steps are more effective in raising your credit score like always paying your bills on time and keeping your credit card balances consistently low.
It’s also important to keep in mind that after a rapid rescore, your scores might not actually go up. If you’ve recently skipped a credit card payment, become delinquent on other bills, had a raise in hard inquiries, closed a line of credit, or had any other kind of negative entry, asking for a rapid rescore will likely lower your credit scores.
Rapid rescoring is most useful when you can make some quick fixes to your credit.
How to Qualify for a Rapid Rescore?
Generally, rapid rescoring is best suited if your credit scores are within close range of qualifying for a better interest rate on a home loan.
In most cases, there is no mystery involved in rapid rescoring—this is because you, as the borrower, should already be able to prove that your credit report contains an error.
Likewise, if you’re using rapid rescore to obtain an updated score after paying down debt or taking other steps to improve your credit, your mortgage broker or lender should already anticipate how your actions will affect your credit score.
How Long Does it Take to Get a Rapid Rescore?
With a rapid rescore, you can expect results as quickly as 72 hours, although it can take up to a week to receive your updated credit score.
Your lender can usually give you a good idea of what to expect in terms of a timeline.
