Raise Your Credit Score for Low Interest Rates on a Mortgage

You may be about to buy a new home and you want to raise your credit score fast for the best interest rates on a mortgage.

You have learned that when you raise your credit score you can get a mortgage more easily and your mortgage will have a lower interest rate.

This means that you very possibly may save $100,000, if not much more, on your interest payments over the life of your mortgage.

Here is how this works. With a great credit score of around 760 you will get one of the best interest rates for, say a $250,000 mortgage. But, let’s say your score is only 100 points lower. You will get a little higher interest rate and you’ll pay about $29,350 more in interest. But, let your credit score drop another 100 points, to say 560, and you’ll wind up with a much higher rate of interest and will pay a whopping $229,428 extra in interest over the life of a 30 year montage. So, if you want to save money by getting the best interest rate possible on your mortgage, there are some definite steps you should take right now.

Steps to Raise Your Credit Score

First, take a look at your credit reports. You can get your credit reports for free from the three major credit reporting agencies, Equifax, Experian, and TransUnion. Get them at annualcreditreport.com.

Your credit score is determined by the information on your credit report. Look carefully at the information on each credit report. Make sure the information is accurate. If you find inaccurate information like lower credit limits than you actually have, late payments or collections that are not yours you need to write to the agency reporting the incorrect information to ask that the inaccurate items be corrected or removed.

Second, make sure you always pay your bills on time. Your payment history is the most important factor used in computing your credit score. If you pay late or skip payments your credit score will be lowered quickly. Though recovery from these errors takes time, a recent history of on time payments will bring your credit score back up.

Third, reduce your total outstanding debt. If you have large outstanding balances on your credit cards, now is the time to reduce those balances. If the amount you owe is close to your credit limit then you are seen as a person who has difficulty controlling credit and is likely not to be able to pay your bills. This results in a lower credit score. You can boost your credit score by paying down your debt. So, don’t max out your credit cards, even at Christmas.

Fourth, don’t close credit accounts. Even if you don’t use a credit account very much, keep it open. This is important for two reasons. Credit accounts with little or no balance help lower the ratio of the total amount your owe compared to the total credit available. And, older accounts show a lengthy credit history. Both factors are important in giving your credit score a needed boost. Make sure you use older credit accounts, if only once a year, to make sure they remain active and continue to be reported to the credit reporting agencies.

Fifth, if you are trying to get a loan, don’t prolong the process. Each time you are evaluated for a loan a credit inquiry is made to pull your credit information. A person with many queries over a long time is seen as desperate for money. These multiple inquiries will lower your credit score. But, if you have several inquiries reported in a short time, perhaps a week or two, theses are seen as once incident of seeking a loan will not lower your credit score.

Finally, if you are someone with little or no credit history, you should begin to develop a history now. If you do not have credit cards, you should apply for a secured credit card. This type of card allows you to charge the amount you have in a bank account. This will allow you to develop a credit history that will lead to you being able to acquire unsecured credit cards.

By planning ahead and taking action right now you can raise your credit score, lower your interest payments and save money.

Incoming search terms:

• how long for a hsbc cheque to clear
• can i get a home mortgage with a 560 credit score
• my credit score is 560 will i be able to buy a house
• my credit score is 560 i open credit card
• interest rate with a 560 credit score
• improve credit score to lower interest rate
• important reasons why to raise your credit
• hsbc credit 올리기
• how to improve little credit score
• how fast will a 560 credit score recover from late payments