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What is a rapid rescore?

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    You're about to make a life-changing purchase—buying a home! If you're feeling overwhelmed about the process, don't worry. We know that home buying can be confusing, especially when it comes to your credit. When you enroll in Chase Credit Journey®, you can get access to your free credit score as well as free resources to help you make financial decisions, such as how to improve your score to get better mortgage rates.

    As you go through the process of taking out a mortgage, you may have heard of a "rapid rescore," otherwise known as a credit bureau update (CBU). This is a tool that lenders may use when it comes to providing you with specific mortgage rates. NOTE: Not all lenders offer this service, so you will need to check with your specific lender.

    In this article, we will discuss:

    • How your credit score affects your mortgage rates
    • How the rapid rescore works
    • Steps to take to get a rapid rescore
    • When you should request a rapid rescore
    • Monitoring your score after mortgage

    How your credit score can affect your mortgage rates

    Having a good credit score can help you land low annual percentage rates (APRs) for mortgages, car loans and more. A good score indicates to your potential lender that you are responsible with your money and will make your payments on time. With a lower credit score, you could face higher interest rates or even be declined for a mortgage.

    However, even if you have a good credit score, you may receive a less than ideal rate on your mortgage. That's because there are other factors that could be considered when it comes to lenders' decisions. This includes your down payment and loan to value ratio. If you have a smaller down payment, you owe more towards the lender, which could result in an increase in interest rates and higher monthly payments. If you have high credit card balances that still need to be paid off, this could also prevent you from getting a lower interest rate.

    By making small changes to improve your credit score, you can save money on your mortgage. This is where a rapid rescore could be helpful for you.

    How does a rapid rescore work?

    Let's say you have a credit score of 680. This is a fair score, but if your score was higher—even if just by a few points—you might be eligible for a lower mortgage rate than you would otherwise.

    So, you take a look at your credit card balances. Perhaps you use Credit Journey® and you've learned that your credit utilization ratio is an important factor when determining your score. This ratio is the proportion of your credit card balances to your credit limit. You realize that if you pay off your credit card balances, this ratio will decrease and your score could improve.

    This is great news! This is one way you can quickly improve your score to potentially get a better mortgage rate. So, you go ahead and pay off the balances on your credit cards—only to find out that the three main credit bureaus—Experian™, TransUnion® and Equifax®—often don't update your credit score and your credit report for about 30–60 days. When it comes to buying your dream home, time is of the essence, and you know you can't wait this long.

    That's when the rapid rescore can be helpful. A rapid rescore is a tool your lender could offer as a way for you to receive an updated version of your credit score more quickly. Let's discuss how this works in more detail below.

    3 steps to getting your rapid rescore

    Below are the steps that come with getting your rapid rescore. Remember, not all lenders offer this, so confirm that this is a tool that you can use should you request for an updated score.

    Step 1

    After you've made recent changes (such as paying off credit card balances) and requested a rapid rescore from your lender, the lender will request for a new credit report from the credit bureau(s). According to Experian, this initiates a hard inquiry, which could hurt your credit score, but only by a few points.

    Step 2

    Your lender will receive an updated credit report showing the new score. Keep in mind that depending on the credit bureau, this could update either your Vantage Score® or FICO® score.

    Step 3

    Once the new credit score is reflected in your report, your lender can update your contract and provide you with new rates. Increasing your score into a new range (such as from "fair" to "very good") could result in saving thousands of dollars over time.

    How long does rapid rescore take?

    Unlike traditional updates to your score, which can take anywhere from 30-60 days, the rapid rescore may typically takes 2-3 days, according to Experian. Once you get your updated score, it may take an additional few days to work out the new percentages and contracts with your mortgage lender.

    When should you request a rapid rescore?

    You may want to request a rapid rescore if your current score isn't entirely reflecting your financial activity. For example, you made a recent payment towards your credit card bill, without having maxed out or used another card, you could improve your score. However, this activity won't get reflected for another 30-60 days—time you don't have to waste! A rapid rescore will capture this positive activity and calculate it towards your new credit score in just a few days.

    You could request a rapid rescore because you're serious about the home you are buying. If you are a strong candidate for a mortgage but looking to save some extra money over time and time, a rapid rescore can help you achieve your home lending goals.

    Rapid rescores can also be used when you're applying for a top-level credit card and want to ensure that you'll be approved. Since you cannot do this on your own, you'll need to request this service from your lender. Sometimes just a few extra points added to your credit score is all it takes to improve your standing.

    What happens if my credit score remains low?

    Sometimes, even with improvements, your credit score may still remain too low to get the kind of rates you're hoping for. This lower score could be due to other factors, such as derogatory remarks on your credit report. You can learn more about these remarks and how to you can manage your finances in a healthy way with Chase Credit Journey and how to potentially avoid them.

    Have no fear—while a low credit score can pose a challenge, there are some ways to land a better rate even if your score hasn't changed much (or at all). These include:

    • A bigger down payment—the more you pay upfront, the less you will owe and have more equity in your home.
    • Buying mortgage discount points—you may be able to purchase part of the interest on your loan up front, which can lower your monthly payment. This is a good option if you plan to be in this home for a long time so you can commit to making more payments overtime.
    • Change your existing mortgage rate—you may end up buying a home with a less than ideal rate, but down the line, you may have options like refinancing your loan.

    Continue to monitor your credit score

    Once you've signed off on your mortgage and have your new home, don't forget that your credit score can be impacted. You'll want to monitor it with Chase Credit Journey's free credit and identity monitoring services so that you can continue to keep your credit score safe.

    When you enroll in Chase Credit Journey, you can see how different factors and financial choices can impact your credit score. You'll also be able to check your score as frequently as you'd like without harming your score. When you check it regularly, the score will be refreshed every 7 days. When checked infrequently, your score will be updated monthly. Note, however, that a rapid rescore may or may not get reflected in your Chase Credit Journey credit score.

    Monitoring your score is a great way to maintain and improve your credit journey as you continue to meet life's milestones.

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