If your score is above 720 you should have no trouble qualifying for a low rate loan. But the lower your score the more difficult it will be to qualify, and the higher the interest will be. Your monthly payments can be over 40% higher with low scores.
Here is a chart that illustrates the effect of a low credit score can cost you over the life of a loan:
*Based on a 30 year $200,000 loan at 5.6% interest rate.
How your FICO (Credit) score directly affects your Interest Rate:
FICO stands for Fair, Isaac & Co. They are the ones who created the mathematical formula used to calculate what is commonly called the FICO score. This three-digit number is a big determinant in whether or not you get a mortgage or any other type of loan. FICO helps banks, credit card issuers, auto loan companies, and other lenders decide if you’re a good credit risk. It also makes a difference in the interest rate you’re offered. Obviously, the higher your score, the more likely you will be approved for a mortgage with a low rate.
*Based on previous rates.
As you can see, a credit score of 720 or higher is the magic number to hit.
It’s as simple as this:
A better credit report will raise your credit score. A higher credit score will get you a lower interest rate. The lower your interest rate, the more money you will save.
You can repair your Credit quickly. You can have negative misinformation wiped away from your reports, you can negotiate with creditors to remove negative postings and lower your payments, and you can raise your credit score higher so you can get the loan that you want at a low interest rate you deserve. All it takes is perseverance, a positive attitude and knowledge.
You are reading these tips and that means you are positive towards your credit goals and will likely to take action on boosting your credit score.
One Credit Guy can help you boost your credit score. Get personalized consultation on the best practices and approaches to Increase your Credit Score. You may schedule your FREE Consultation – Book it Here.
One Credit Guy do also offers a Do-It-Yourself Credit Repair Kit for FREE if you download the Ebook “The Secrets to Better Credit”. -Download it here: The Secrets to Better Credit (Ebook) + Do-It-Yourself Credit Repair Kit