When you’re trying to buy a home, your credit score is important. A poor score or negative information on your credit history can prevent your bank or lender from approving your mortgage application. If there are flaws or mistakes in your credit report that can be quickly remedied, you may be able to “rescore” your credit application.
Rescoring a Mortgage Application
The term “rescore,” also called “rapid rescore,” is the process of quickly fixing mistakes or adjusting certain factors in your credit report and then having one or more credit bureaus rescore your credit. Improving your credit score enough to reapply for a mortgage loan usually takes time. But with a rescore, you may be able to change the score on your credit application in a matter of days, and sometimes the same day. However, a rescore will only be effective if you have done something to change the outcome of the score in a positive way. This may include settling a negative account or correcting false information.
According to ABC News, 90 percent of credit reports contain inaccurate information. This inaccurate information could be causing a dip in your credit score, so it’s in your best interest to get your report corrected. Credit rescoring may particularly help people who have been the victims of identity theft, as they may be able to more easily correct negative, inaccurate information on their reports. If, for example, someone else’s unpaid account lands on your credit report, a rescore would involve petitioning one or more credit rating bureaus to remove the information, and then rescoring your credit.
While inaccurate information might lower your credit score, negative information – regardless of fault – most certainly will. For example, if your credit score is low because of an account sent to collections, your mortgage lender might direct you to pay off the account, after which he will rescore the mortgage application. Since the account is no longer outstanding, you may see a rapid rise in your score – and get a better mortgage interest rate in return. You might also call your credit card providers and request limit increases. If approved, this can help raise your score by lowering your balance-to-limit ratio.
How to Rescore
Credit rescoring is not something you can do yourself, and it is only available for mortgage applications. If you are a good candidate, your lender may give you instructions on repairing credit accounts or correcting information. The lender will then submit your information to one or more credit rating bureaus, which will make the change to your report. It could take as long as 30 days to see a change in your report if you dispute the information yourself. Your lender, on the other hand, can get the change made to your credit report in a matter of days.
- Image Source/Digital Vision/Getty Images
- What Is an Open-End Loan?
- Can I Add My Wife to My Deed With an FHA Loan?
- What Is an 80/20 Mortgage Loan?
- How to Know If My Mortgage Broker Is Legitimate?
- What Are the Different Kinds of Mortgage Loans?
- How to Obtain a Regular Mortgage Loan Secured by the Property Being Purchased
- What Happens If a Mortgage Appraisal Is Low?
- What Does Subject to Existing Deed of Trust Mean?
- What Is the Difference Between a Conventional Mortgage & a Portfolio Mortgage Loan?
- What Are the Two Primary Classifications of a Mortgage Loan?