Your credit profile affects mortgage rates
Mortgage Rates – How to get the Best
Trying to score good mortgage rates is like playing sports or working out. There’s strategy involved, and you’re probably going to break a sweat. Your credit report score plays a major role in the mortgage rate you end up with, and there are steps you can take to ensure you’re putting your best foot forward to optimize your chance for success of obtaining a low mortgage rate.
Check your credit reports
It’s a good idea to check your credit report from the three major credit reporting agencies, which you can do for free at AnnualCreditReport.com. You’ll want to as far in advance of buying a home or refinancing your mortgage so you have a chance at obtaining the best mortgage rates. Review the reports and be sure to dispute any errors you find — you can do this easily by going to the website of the credit reporting agency in question. The three major agencies are Experian, Equifax and TransUnion. You can also look at hiring a credit repair company to help you if you don’t want to do it yourself.
Don’t appear ‘credit hungry’
Avoid seeking new credit while you are home shopping or looking to refinance. Buying a new car or applying for new credit cards can temporarily bring down your credit score, affecting the mortgage rates you are offered. Nothing sucks more than getting the car but not having the garage to park it in.
Mind your credit card balances
The amount of money you owe on your credit cards versus your available credit plays a major role in your credit score — in fact, 30 percent of your FICO credit score is dedicated to your current credit use. Creditors like to see you aren’t using all of your available credit. Nobody wants to lend to a maxed out borrower. So if you pay down your balances now, you’ll likely see an improvement in your credit score very soon. Mortgage rates remain relatively low, and one of the most painless ways to snag an attractive rate is by simply having good credit. Follow these steps and you could be well on your way to enjoying the low rate of your dreams.
