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What is a Rapid Rescore? Is it something I should consider?

Dear Experian,

I currently have a pre-approval for a home loan and would like to get a better rate by improving my credit scores. I have credit cards and installment accounts. I must pay off the installment accounts as a stipulation of the loan before closing. Once I pay them off, will my credit score improve, and I can do a rapid re-score to get best rate? Also, what percent of credit card usage is best for my credit score?

– SNG

Dear SNG,

Your lender may require you to pay off any past due debts or outstanding loan amounts before approving your mortgage loan application.

Reducing high credit card balances can also help your credit score by reducing your utilization rate, also called your balance-to-limit ratio. Your utilization rate should be no more than 30%. The lower your credit card balances are, the better.

Even after you make the necessary payments, it may take a full billing cycle for your creditors to process those payments and submit the information to the credit reporting agencies for your credit reports to be updated. Scores calculated after the updates have been made will reflect the changes.

What is a Rapid Rescore?

The term “rapid rescore” refers to a process by which a mortgage lender submits proof to a credit reporting agency of recent changes or updates to account information that are not yet reflected on the credit report. Because mortgage loans are often time-sensitive, the lender pays a fee to the credit reporting agency to have the new information updated within an expedited time frame.

Once the credit report is updated, a new credit score can be requested that will reflect those updates and ideally result in a higher score. This service is offered only through your lender, so you cannot request a rapid rescore on your own.

Is a Rapid Rescore Something I Should Consider?

A rapid rescore is usually recommended by your lender when your current credit score falls within a few points of the score that is needed to qualify for a better rate or loan terms.

If you have the means to pay down your debts and have a current credit score that is relatively close to the score the bank says you need, it may make sense to ask your lender to take advantage of a rapid rescore option in order to save money on interest and fees in the long run.

Thanks for asking,
The “Ask Experian” Team

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