Mortgage rates have risen substantially over the past couple of years. As a result, more…
In this article, we will explain what a rapid rescore is and how it could help you qualify for a mortgage loan in California.
Most home buyers in California have never even heard of a rapid rescore. Even so, many of them could actually benefit from using one. A rapid rescore can help you update your credit score faster than usual. This in turn could help you qualify for mortgage loan and possibly get a lower interest rate as well.
But what is a rapid rescore, exactly? And how do you go about obtaining one? Let’s explore!
What Is a Rapid Rescore?
A rapid rescore is a way to get your credit score updated more quickly than usual. This can be helpful if you have recently made positive changes to your credit, such as paying down debt or making payments on time.
To get a rapid rescore, you will need to contact your mortgage lender and provide documentation of the positive changes to your credit. Your lender will then request that the credit bureaus update your report.
For us, the process typically only takes a few days, as long as we have the documentation from the client.
Just know that a rapid rescore is not a guarantee that your score will increase. The credit bureaus will still review your credit report and decide whether or not to update your score. However, if you have recently made positive changes to your credit, a rapid rescore can give you a better chance of improving your score.
How the Process Works
The steps involved in the rapid rescore process can vary from one lender to the next. We have developed a streamlined and efficient process that works like this:
- We run an initial credit report to find out where the client stands currently.
- We then run a specialized report to determine the potential score improvement.
- This report also explains what the borrower can do to improve the score. (For example, it might recommend paying down a specific credit card balance from $4,000 to $3,500.)
- The borrower takes the recommended action, which typically involves paying down debt.
- The borrower sends us documentation to show they have paid off or paid down the debt.
- We submit this information to the credit bureaus and wait 2 to 5 business days.
- After that, we’re able to run a new report with a new and improved score!
According to Experian, one of the three major reporting bureaus in the United States: “Once the credit report is updated, the lender can request a new credit score that will reflect those updates and ideally result in a higher score. This service is offered only through your lender — you cannot request a rapid rescore on your own.”
Now that you have a basic understanding of the process, let’s shift gears and talk about how it could benefit you in buying a home in California.
The Mortgage-Related Benefits
In many cases, the rapid rescore process can increase a person’s credit score. That’s the whole point of pursuing this process in the first place. A higher credit score, in turn, can offer a number of benefits for someone who is buying a home in California
First, it can help you qualify for a mortgage in the first place. Lenders use credit scores to determine who is eligible for a home loan and what interest rate they will be offered. A higher credit score can make you more likely to be approved for a mortgage, and can qualify you for a lower interest rate.
Second, a rapid rescore can help you get a better interest rate on your mortgage. Even if you are approved for a mortgage, a higher credit score can help you get a lower interest rate. This can help you lower your monthly payments and possibly save thousands of dollars over the life of your mortgage.
Third, a rapid rescore can help you get approved for a larger mortgage. A higher credit score can improve your borrowing power, which means that you will be able to borrow more money. And this is a big deal in an expensive real estate market like California, where it costs more to buy a home.
We just talked about how a rapid rescore could potentially help a home buyer qualify for a lower mortgage rate. This in turn could pave the way for additional benefits, in the form of a lower monthly payment.
In addition to saving you money on your monthly payments, a lower mortgage rate can also reduce the total amount of interest you pay over the life of the loan.
Summary of Key Points
We’ve covered a lot of information here, because we believe this is an important topic for California home buyers to understand. So let’s wrap up by summarizing some of the most important points:
- A rapid rescore is a process that allows you to update your credit report quickly, potentially increasing your score and helping you qualify for a better mortgage.
- When you apply for a mortgage, lenders use your credit score to determine your eligibility and the interest rate you will be offered. A higher credit score can make you more attractive to lenders and qualify you for a lower interest rate.
- There are a number of things that can affect your credit score, including your payment history, debt levels, and the length of your credit history. If you have recently made positive changes in these areas, you might benefit from a rapid rescore.
- To get started, you will need to contact your lender and provide documentation of the positive changes to your credit. Your lender will then request that the credit bureaus update your report. The process typically takes less than a week to complete, as long as you have the necessary documentation ready.
- Rapid rescoring is not a guarantee that your credit score will increase. But it can be a helpful tool for California home buyers who are looking to improve their score and qualify for a mortgage loan.
Have mortgage questions? Bridgepoint Funding serves home buyers and homeowners all across the state of California. We offer a wide range of mortgage financing options, some with very flexible qualification guidelines. Please contact us if you have mortgage questions or would like to apply for a loan.