Wrecked credit scores are most often the reason people are still renting and cannot buy a home. A great lender will help you fix your credit, legitimately, and at no cost to you. Read on to find out how one of my lenders, Anna Baamonde is helping clients clean up their credit faster and get them into their dream homes!
Credit scores can feel like a mystery. Scoring models don’t always work as expected, and in my experience, there are a few facts about credit that consistently surprise my clients as their loan officer:
- Having debt does not hurt your credit. Credit scores, in a nutshell, are based on your ability to manage your debt over time – which does not necessarily mean owing $0.
- Disputes do not automatically delete negative information. Mortgage lenders actually require disputes to be removed from your report, so unless you can prove that something is incorrect, disputing may not be in your best interest when buying a home.
- Credit cards impact your scores in many ways. One is the amount of credit that you habitually use, relative to the total credit limit. For example: say you have one person who owes $250 on a $1,000 card, and another who owes $2,500 on a $10,000 card. The balance is affecting both their scores similarly, since they are both using 25% of their available credit.
So what happens if you pay down credit cards? Or, what if a creditor agrees to correct something? It can take a few months for this to be processed, and to give your scores the boost you’re looking for. That’s where rapid rescoring comes in.
What is it?
Rapid rescoring allows us to take documentation (ex., updated credit card statement) showing the corrected information, and submit it to the credit bureaus for a rush investigation. Then we can access an updated credit report in 5-7 business days, instead of months down the road.
Rapid rescoring is NOT credit repair. If you really did make that late payment, or if that loan really is delinquent, then the information is accurate and your report is correct – the “fix,” in these cases, would be to correct your past credit mistakes with better financial management in the future.
Why use it?
Because credit is king in the mortgage world! Rapid rescoring helps when there is inaccurate or outdated information on their report. For example: a tax lien may be marked “unsatisfied”, but if there’s proof that the tax lien was paid or released, then we can have the credit report updated accordingly. Or, maybe you recently paid down a credit card, and the older, higher balance is still reporting – we can update the report to show the current, lower balance on your new report.
How does this affect my credit?
Credit scores ebb and flow as your profile changes over time. Rapid rescoring allows recent updates to be reflected on your report more quickly.
How does it affect my home purchase?
Credit is king – your scores will impact if you qualify for a mortgage, the type of loan you can qualify for, and the interest rate and mortgage insurance pricing available to you. If we can take the simple step of updating your report to your benefit, then that’s one easy way that we work towards providing you with the highest possible level of customer service.
This is not a guarantee to extend consumer credit as defined by Section 1026.2 of Regulation Z. Programs, interest rates, terms and fees are subject to change without notice. All loans are subject to credit approval and property appraisal. First Home Mortgage Corporation NMLS ID #71603 (www.nmlsconsumeraccess.org). Equal Housing Lender.