What is Rapid Rescoring?

What is Rapid Rescoring?

Get this. Your credit score will impact your entire life. 

From your first apartment to the house you retire in, you can bet that lenders will be checking your credit report. A credit score is a number, typically between 300-850, that tells lenders how responsible you are with your money. Your credit report will track all your missed payments over the years. If that makes you nervous, it should.
Typically, changing a credit score is a slow process.

But what happens if you need something adjusted quickly? That’s where rapid rescoring comes in.

Lenders offer rapid rescoring for those looking for a quick bump in their credit report. Rapid rescoring is the process of quickly adding items to your credit report to help you get a better mortgage.

Hold the phone. What’s a mortgage?

Don’t stress. We’ll get into everything. In this article, we’ll break down the nitty-gritty of rapid rescoring and why it could help you down the road.

what is rapid rescoring

What’s a Mortgage?

Let’s get this out of the way. 

A mortgage is a deal you make with a lender to get a home or property. You’ll likely have to pay monthly fees to afford your home. Think of it like Netflix, but on a much bigger scale. 

The price of your mortgage depends on a few factors.

  • Loan balance: the total price of the mortgage 
  • Interest Rate: the amount of interest on the mortgage payments 
  • Term: the repayment period for the mortgage 

Long story short: if you can’t pay off your mortgage, the lender takes back the property. 

But before all this, the borrower has to apply and pass checks and qualifications, one of those being…

*Dramatic drumroll* 

Your credit score! 

credit score

What if My Credit Score is Too Low?

So you’re applying for a mortgage, but your credit score is down bad. Let’s say back in 2022, you bought one too many iced lattes on a credit card and didn’t pay any of them on time. 

With a bad credit score, your interest rate will typically be higher. Worst case, you might not get the mortgage at all. After you say, “Um,” and pace around a bit, it’s time to get to business.

What can you do? Let’s boost that credit score. 

How Long Does it Take to Update Credit Score?

It’s time to change that credit score. You can try increasing your score by fixing errors in your credit report, reducing your debit-to-credit ratio, or making all your payments on time, but these are typically slow processes. 

Credit scores generally update when lenders add new information, typically only once a month or even once every 45 days.

But in some cases, you don’t have that time. You need that mortgage now. So when you need a quick boost to your credit score, what can you do? 

That’s where rapid rescoring comes in.

How to Update Credit Report Quickly?

While you may not be able to immediately transform a bad credit score into a great one, even minor adjustments can help lower your interest rate, saving you thousands of dollars in the long run.

Credit card companies and mortgage lenders know this and offer the option of rapid rescoring. Rapid rescoring is just what it sounds like, a fast-paced update for your credit score. 

In this process, your lender will request the rescore to the three major credit bureaus on your behalf. The credit bureaus will then accelerate the request, changing your credit score in 3-5 business days. That’s a lot better than a month. 

How to Increase Your Credit Score with Rapid Rescoring

Using a rapid rescore works, but you have to make sure to engage in actual credit repair. 

Rapid rescoring is most effective when you have quick fixes for your credit. For instance, if you have overdue credit card balances, use this opportunity to pay them off. Your new credit score should show the effect of those changes and help you with your home loan. 

How Much Does it Cost to Rapid Rescore Credit? 

Rescoring costs vary, but your mortgage lender will typically take the hit. 

Of course, you’ll likely end up paying long-term out of their closing costs, but it’ll be worth it for all you can save in interest.

The Pitfalls of Rapid Rescoring

Don’t go into your rapid rescore thinking it will transform your finance. While a rapid rescore can boost your credit, it isn’t magic.

A rescore won’t eliminate anything that’s supposed to be on your report. If you’re hoping to get rid of that late payment, you may be out of luck. Be careful before requesting a rapid rescore. If you didn’t change your payment history or missed a payment, your credit score could still go down. 

Stay Knowledgable; Use Extra.

You can breathe easily. Since you’re just starting your financial adventure, you hopefully won’t need a mortgage for a long time. When you do, hopefully, you’ve kept your credit score in a great place.

If you make a mistake (we all do), consider using rapid rescoring to boost your credit score quickly. It may just be the difference between you and a mortgage.

In the meantime, learn what you can do to start building credit young. EXTRA offers the first debit card that helps you build credit. Read more about it on our blog and other articles to keep your financial literacy high. Explore the different types of credit scores and how to create and stick to a budgeting plan. 

Start investing in your future. We promise it’ll pay off. 

what is rapid rescoring

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