Your credit score is a number that summarizes your credit report. It is the end result of a very complicated formula that takes into account how well you pay your bills, how much debt you have, how “maxed-out” your credit cards are, etc. Lenders are relying more and more upon your credit score to determine not only if they will approve your loan, but also what rate you pay. For example, if your credit score is between 600 and 700, you would probably still get approved, but at a slightly higher interest rate than if it was 700 or more.
Sometimes, there will be an error on your report that brings your score down to just under the lender’s “cutoff” number. An incorrect reporting of one late payment on your report can drop your score by 10-15 points, or more. I’ve seen buyers with scores at 599, and they needed scores at 600 to get the loan they wanted. This is a frustrating situation because it can take a month or more to get some errors in your credit report corrected through the normal channels. By then you may have lost the home you wanted to buy, or the interest rate you wanted.
If you are faced with this situation, ask your loan officer if you are a candidate for a “rapid rescore.” If you have documents to prove your case that the information in your credit report is incorrect, you can request a rescoring of your credit report with the new, correct information. This may result in your scores going up, and this can happen in as short as a few days. This assumes, of course, that your proof is accepted and the creditor and/or the credit bureau agrees to change the reporting. The only advantage to the rapid rescore is the speed. It shouldn’t result in a larger change to your score than the normal process.
If you have questions about real estate, call me at (925) 240-MOVE (6683). Voted “Best of Brentwood” multiple times. To search the MLS for free, go to: www.SharpHomesOnline.com. Sharp Realty. #01245186