Thursday 3 May 2012

Using Credit Report Info To Get Better Mortgage Rates

By Lynne Keller


If you're satisfied with your current interest rate, you could go even better if you're trying to refinance a pre-existing mortgage you already have. Here is some information and things to do to help you qualify for a lower rate.

Your credit rating is the number one determinant when calculating your interest rate. Give your credit a fine tuning about six months before applying for a mortgage, just like you'd tune up your car before buying new parts. If you find an error on your credit report, the Fair Credit Reporting Act (FCRA) allows you to dispute those errors.

You should always have a copy of your latest credit reports. Each of the three credit reporting agencies are required by law to provide every American a free-of-charge copy of his or her credit report annually. Equifax, Experian and Trans Union are the three major credit reporting agencies. annualcreditreport.com provides you a means to request these free copies online.

Any error you find in your credit reports needs to be disputed as soon as possible. From the time you report the discrepancy, wait a month for the credit reporting agency to investigate the issue. The information can be deleted by the credit agency if they aren't able to find any means to legitimize the information.

Some circles in the financial industry believe that a large number of credit records maintained contain inaccurate credit information. But it would still be your responsibility to ensure your credit reports' accuracy. Errors that you report would be submitted to the creditors in question for review. Like other disputes, there is no guarantee of success, which means you may need to course any further action to the creditor should they see no cause for the information to be disputed.

The next thing to do after verifying your credit accuracy is to make sure your payment history is in order and as good as possible. Do not chase a lower interest rate if your payment history isn't that good at all to begin with. You will need to give a six month allowance at least before taking out a mortgage, to focus on making on-time payments for your credit cards or other monthly payments.

Your repayment history and credit information plays a very large part in determining your overall credit score. If you follow the tips above and make sure your credit is in order, you can easily improve on your mortgage rates and credit score.




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