Credit scores play a huge role in today’s mortgage market. Blame it on the high default rates of the last half-decade brought on by lending standards that let anyone borrow almost any amount of money. Lenders are reserving their lowest rates for the customers that are most likely to make on-time repayments and history has shown that the higher your credit score is, the lower risk you are.
Mortgage rates are near an all-time low in Minnesota. However, the low rates you see advertised on TV and online are only available to the home buyers and would-be refinancers whose credit scores are pristine. Having a high credit score is often the difference between getting “the best rates” from your lender, and getting something worse.
The first part of improving your credit score is understanding how it works. In this 5-minute piece from NBC’s The Today Show, you’ll learn the basics :
- Why you shouldn’t close a credit card after you pay off a large debt
- What is the maximum balance to leave on your credit cards, relative to your credit limit
- What types of credit checks harm your credit scores, and which ones don’t
You’ll also learn how to shop for a mortgage with multiple lenders without having your credit score “dinged”, as well as several proven methods to raise your credit score quickly.
In the end, good credit scores are the result of paying bills on time and staying with your means. Those with the best scores, get the best rates.