To get the lowest possible mortgage rate, you may want to consider doing a rapid rescore.
Understanding Rapid Rescore to Improve Your Credit Score
Rapid rescore is the process of taking out errors on your credit report. These errors decrease your credit score drastically and can inhibit your ability to receive the lowest possible mortgage rate available.
For example, if you have a balance on a credit card that you didn’t know about because of either an error on the creditor’s part or from identity theft, your credit score could be lowered by as much as 100 points. Once this error is corrected, you can have a rapid rescore done, which will increase your credit score and give you a better mortgage rate. The difference in mortgage rate from one credit score to another depends on how much it jumped after the credit rescore. With a 100 point jump however, you could see your rate go from 6.9 percent to 5.6 percent, which saves you at least a 100 dollars on your monthly mortgage payment.
How to Know You Need a Credit Rescore
If you have a FICO score of 680 or less, you should look at your credit report to see why. If you simply have a lot of debt or you haven’t paid on some bills in the past, there is nothing you can do. Credit rescoring will only work for you if you have ERRORS on your report. The creditors must be willing to rectify these errors and eliminate them from your credit report before it increases your credit score.
How to Get a Credit Rescore
Go through your mortgage lender! Ask for a recommendation on a company they have worked with because they will know the reputable ones who will get the process done as quickly as possible. If you search the Internet, you’ll find many that promise 24 to 72 hour turnaround time. Don’t believe these false promises, it usually takes a week or more to get credit errors cleared up and your credit rescored.
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