When applying for a mortgage loan, one of the determining factors used to qualify for a mortgage loan is your credit score (also known as a FICO Score). Your FICO score is a numerical representation of your credit history that represents your creditworthiness and typically ranges from 500 – 815. The higher the FICO score, the better.
Your credit score is made up of a number of five key factors. These factors are:
- On-time Payment History
- Credit Utilization
- Credit History
- Credit Mix
- Newly Establish Credit Inquiries
For an in-depth look at each of these factors, please check out the following link.
Each month your FICO score is automatically updated with your payments and balances with the three major credit repositories: Experian, Equifax, and Transunion. As you make payments, pay down debt, and/or increase the balance on your credit cards your score is updated.
Assuming you did not have any major negative credit events, like a missed payment or account going to collection, your credit score generally only fluctuates a few points here and there. These fluctuations can be enough to affect your interest rate.
Enter Rapid Rescore
Rather than waiting a month for scores to update, the goal of the rapid rescore is to get your credit information updated within a few days. A rapid rescore is completed by your mortgage lender.
Your mortgage lender will select a few key credit accounts to update with hopes of improving your score. If you have a collection, you could pay it off and then request a rapid rescore. If you have a large balance on your credit card(s), you could pay it off and then request a rapid rescore.
What you should pay off or down will depend on your specific credit situation and the circumstances. This should be discussed with your Mortgage Loan Originator as they will be able to assist you and process this request on your behalf. If you have any questions, feel free to give us a call at (760) 930-0569.
