Rescoring Can Boost Poor Credit Rating

You would think that the combination of low home prices and low mortgage interest rates would have sent the real estate market soaring, but that hasn’t happened. The fly in the ointment has been exceptionally tight credit. Since getting burned by their own subprime loans, mortgage lenders have made it difficult for consumers with good credit scores to obtain home loans. People with merely average or poor credit scores are finding it impossible to quality for a mortgage loan or any other type of credit.

Mortgage lenders face pressure to adhere to extremely tough underwriting procedures not only from within their own organizations but also from Fannie Mae, Freddie Mac and the Federal Housing Administration. New rules requiring higher credit scores have made obtaining a mortgage loan a real challenge. Mortgage lenders are looking for FICO credit scores of at least 700 and prefer scores in the mid to high 700s.

That’s a tough standard for most folks to meet today. Economic fallout from the recession and continuing high unemployment rates have caused the average U.S. consumer credit score to plummet. More than 43 million Americans — 25% of all consumers — now have FICO scores under 599, putting them in the untouchable category as far as lenders are concerned. It now takes a FICO score of 740 or higher to qualify for Fannie Mae’s best mortgage interest rates.

To combat narrow loan qualifying standards, credit repair professionals have had to get creative to find a way around the roadblocks lenders have tossed in consumers’ paths. Experienced credit repair professionals can fast-track their clients into rapid rescoring programs that have the potential to boost FICO credit scores. Rescorings performed by independent credit reporting agencies vetted by the nation’s big three credit reporting bureaus can change credit file information, presenting a more positive picture of a consumer’s credit life that results in a higher credit score.

Rapid rescoring can usually be accomplished in 3 to 5 days and typically costs between $90 and $200, depending on the number of credit accounts and borrowers. Contact a credit repair specialist to see if rapid rescoring could improve your credit score.