Before I begin, I just would like to let you know this Post is not about Credit Repair or the FICO system. That I will allow others to blog about.
Living and working in Palm Beach Gardens, Florida many of my clients that I have are self-employed and are very aware at all times what their FICO scores are especially after what is happening in the Mortgage Industry. With this is mind I have become quite familiar with the What-If Simulator that most credit agency's offer.
What the credit simulator does, is after you pull the clients credit you are allowed to go back in the Credit agency system and check to see if a client would pay off or pay down on a debt what effects it would have on his/her FICO. Again, as I stated at the beginning of this post, this is not Credit Repair. The benefit of this product is to see exactly what bill or collection being paid off or paid down will do to there FICO.
This is a real life client of mine that I just used the what if scenario on.
I have been in the finance business for many years now and I have to tell you my first thought was to pay down of the first 2 CC's and that should help her. Imagine my surprise when after running the scenario all the client has to do is pay $1,000 towards the larger balance. When the client does this their FICO scores will jump by 22 points. This is amazing and true.
Does the client have to wait 30 to 60 days before the scores change?
This is the best part. NO THEY DO NOT HAVE TO WAIT. This is what they call a rapid re-score. Once the client pays down on the credit card I will receive a letter showing todays balance. I fax that in along with the What if Scenario work sheet and for a fee ( always a fee) the credit agency will do a rapid re-score which should take 3 to 5 business days and will re-issue the credit with the new FICO scores.
You did read this correct. The credit agency will re-issue the credit, This is not another credit pull.
In closing when shopping for your next mortgage find out if your Mortgage Professional offers such a service. Remember Rate is only part of the equation. This is just one of the reason why to seek out a TRUE FULL-TIME Mortgage Professional.
Do you think my clients rate and program changed when their FICO was a 607 and now a 629?
For more Mortgage Advice: Mortgage Advice in South Florida or Palm Beach Gardens Mortgage Advice
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Full-Time Mortgage Broker in South FL. Palm Beach County. Specializing in Hard Money / Private Money, Foreign Nationals, Jumbo and Super Jumbo Loans. In addition I work with Today's Premiere Lenders.
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No..it didn't change...did I win the prize?:)
Neal in the clients case the difference really is having a mortgage or not getting financed..
Matt..... this is a great topic which is not talked about often or that many loan officers even use this or know about it. Between the credit simulator which has a few different names depending on the credit agency that you use and the rapid rescoring, you can certainly get those clients a better score, rate, and program at times. Nicely explained.
Hey Matt, this is great information. Thanks for posting it. I may have to refer back to this sometime.
Jeff, I agree with you depending on the agency thier are many different names but basically they all do the same thing. THank you for you kind words
Stephanie, Thank you. I am glad I could help
This is wonderful information - I had heard this before but never seen it illustrated like this... nice job
Thesa, Thank you. I really tried to make it simple.
I have used rapid rescore...
the what if simulator is a great tool
WOW great - Thanks for the info...
Matt, great information. I have used the rapid rescore many times and the simulator is a huge help! It can be the difference between getting financed and NOT in todays industry.
Hi Matt, I am familiar with both products. This, though, is the best I have ever seen it explained. You did a tremendous job! :-)
David, I agree with you it is a great tool
James, My pleasure.
Kim, I believe it really shows who is the professional and who is the wanna be...
Sarah, Thank you.. I tried to write it towards the consumer on Localism.
Matt,
Well it's nice to see topics like this, that can help out virtually everyone, your a great Mortgage Broker, I think you would be a great Realtor as well, if you wore two hats, but you stick to one thing, and you work you butt off at that, smart move, it's amazing how someone can juggle two different professions.
Great Post,
Tom Weiss
Tom, Thank you I believe you really should not wear two hats.
Very good info that I bet most people do not even have a clue about ! Katerina
Katerina, I agree. That is what sets the true professional apart.
Matt: Thanks so much for your post. I usually get very much involved in the qualifying of my buyers when they apply for their mortgage financing. I had not heard of the "What If" scenario. What a great tool. It surely would be a waste if in your example the borrowers plunked down some money on their first two credit cards, and it did not help their scores. Again, what a great tool. Thanks for the info and thank you for your post. Karen Anne
Karen Anne, My pleasure for passing on this information. With what is happening in the Mortgage industry today FICO scores are extremely important.