Rapid Rescore Refinance Mortgage Loan Tips

Highlights

  • Review how Rapid Rescore can raise your credit score.
  • Understand that lenders have tightened credit requirements in the past few years.
  • Take the right steps to raise your credit score, to get the best interest rates available.
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Raise your credit score fast, in order to get the lowest interest rate loan

You may be considering refinancing your mortgage, like many homeowners these days, in order to take advantage of the historically low interest rates currently available. After all, interest rates have not been this low in years. It looks like they will continue to stay low, until the economy improves substantially, but it makes sense to look into refinancing now, if it will save you money..

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A big barrier to successfully completing a home mortgage refinance can be your credit score. Lenders are now using extremely tight underwriting guidelines. If your scores are too low to pass the lender's inspection,your loan application can be turned down or you may qualify for a loan that comes with a higher interest rate than the low rates you see advertised.

Fannie Mae's lending guidelines have tightened considerably in the last two years. Even well-qualified borrowers who have good LTVs (loan to value ratios), assets, steady income, job security, and great credit will find that the lending process is more complicated than it was a few years back. Many borrowers are finding that they currently require far more documentation than they did previously. Often, borrowers find these requests difficult to comprehend.

Having a high credit score (over 740) is very important, more important than ever. Even if you have all of the other positive attributes listed above, your mortgage application will be declined if your credit score is too low. How low is too low? Technically, you should be able to get a loan with a score of 620 according to rate sheets published by most lenders. In reality a 620 score will probably be declined by many lenders or result in you qualifying for a loan but with a much higher interest rate.

One great way to raise your credit score is to work with your mortgage broker. Mortgage brokers usually get their credit reports from an accredited credit report provider such as Acranet. Many of these providers offer a service called Rapid Rescore.

A Rapid Rescore is just what the name implies, a way to raise your credit score quickly. Guided by your loan officer, you take a few quick actions and then your credit report is pulled again, usually with very positive results.

Here is how it works: The broker or loan officer will call the credit score provider and request that one of their experts review the credit report. Sometimes you may also be included in a conference call. The analyst at the credit report provider gives his or her expert advice on what specific steps you can take in order to raise your credit score. You should receive instructions on how a specific action will affect your score, so you know how points your score will rise. Recommended actions could include you paying down a specific credit card's balance to a certain level, in order to improve your credit utilization, or getting letters from collection agencies showing that a debt has been paid.

Once you take the appropriate action, the credit score provider will perform the Rapid Rescore. The Rapid Rescore can take as long as a few days. The results can be very positive. At times, the Rapid Rescore can make all the difference in qualifying for a low interest rate. Normally, if you take steps to improve your credit score, it can take up to a few months for the actions you took to appear on your credit report and for your score to rise.

Rapid Rescore corrects the negative, inaccurate items quickly. It can prevent you from being turned down for the loan altogether or from qualifying only for a higher rate loan that could cost you tens of thousands of dollars over the course of the loan.

Ask your loan officer if you will qualify for a better rate if your credit score were higher. Find out exactly how much higher your score would need to be, in order to get a better rate. Make sure to ask your loan officer or mortgage broker about Rapid Rescores. If they don’t know what you are referring to, you may want to get another broker or loan officer.

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4 Comments

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  • TK
    Nov, 2011
    Toni
    Vacaville, CA
    I applied for a Home Loan last year through my bank..when all information was collected and sent to Credco..I was DENIED stating "did not have enough credit established (divorced)..My credit scores were above 700 and I had established a new credit card in my name..Credco used EQIFAX to check my credit which only had one credit card showing. But failed to check experian and Transunion where my other accounts are located.My accts. on experian and transunion are closed but they are still on my reports. Therefore I was denied a home loan because of EQUIFAX
    0 Votes

    • BA
      Nov, 2011
      Bill
      I think your ire for Equifax is misplaced. First, Credco decided to pull your information from only one credit reporting agency, and in my opinion, it should be pulling data from all three when such a mortgage go/no-go decision is at stake. Second, your mortgage underwriter should use a service provider that pulls credit information from three or more credit reporting agencies when making its underwriting decisions. Finally, just because one underwriter made a decision based on incomplete information does not mean all will. Continue shopping for a home loan.
      1 Votes

    • FS
      Sep, 2012
      Frantz
      Pomona, NJ
      I had a mortgage wich I sold about 5-6 years ago. Now I am trying to buy a new home, but I am afraid I will not be qualified due to some hospital bills. However, my recently paid student loans my not show up as pai yet, but I still have the letter. I have been building my wife's credit for the past few years, so it is fairly to say her credit is way better than mine. But I am the main bread winner. My wife only works part-time, and mostly stay at home mom. I did not need my wife's credit in the first mortgage with had, I certainly need hers now. What can I do?
      0 Votes

    • BA
      Sep, 2012
      Bill
      Start by speaking with a loan officer, who will view you and your wife's credit and income and let you know what loan program, if any, you qualify for. You may need to pay off the hospital accounts and you may not. It depends on their size and how recent they are.

      Let the loan officer know you have proof the student loans are paid, so they are not counted in your DTI ratio.

      Depending on your credit score, you may need to look into loan programs like the FHA that have less strict credit requirements or, in a worse case scenario, have to wait a bit while you work on improving your credit.
      0 Votes

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