We found that without question many consumers seeking bad credit home loan and bad credit mortgage refinance benefit from credit re-scoring, also known as rapid re-score. Although mortgage brokers and lenders using rapid re-score services were difficult for us to find, in most cases for a consumer with bad credit seeking a home loan or mortgage refinance the advantages were significant, and well worth the extra effort.
Rapid re-score involves electronically interfacing with all three credit bureaus (Experian, Equifax and TransUnion) and processing disputes of erroneous, obsolete or unverified derogatory credit reporting during the home loan or mortgage refinance origination process. The process is indeed rapid: it takes as little as 72 hours versus 60-120 days with the typical consumer initiated dispute process.
The process begins when a mortgage broker prepares your home loan or mortgage refinance application for the underwriter (the lender). The mortgage broker will use a Standard Factual Report to check the borrower's credit score. This is where re-scoring companies can come in and immediately remove derogatory listings, thereby quickly improving your credit score and the likelihood of approval*.
Rapid re-scoring works within the home loan or mortgage refinance and is not to be mistaken for an economical method to generally repair credit for the consumer. In the home loan and mortgage refinance origination process the goal is increasing the score – not necessarily the removal of a bad credit history. The score can often time be improved by 25-30 points by the alteration of one or two trade-lines. Because home loan and mortgage refinance programs have guidelines that require a specific credit score minimum, this 25-30 point increase can make a significant difference to many consumers:
- Approval for home loans or mortgage refinance that would have otherwise been denied;
- Approval for lower rates, better terms and lower fees;
- The updated credit scores are generally available within 48 hours;
- The changes made through rapid re-score are made directly through the credit bureaus, permanently and positively affecting the consumer's credit history.
