Understand Your Credit Scores, Secure a Lower Interest Rate

June 06, 2011

While the housing market has certainly seen better days, one of the bright spots for homeowners is that interest rates are at all-time lows. This makes now the perfect time to refinance your home, provided your credit scores are in good shape. A recent post on the FreeScore blog illustrates just how important it is to know your credit scores before you apply for a mortgage.

In “A High Score Equals a Low Rate, So Refinance Before It’s Too Late,” the financial experts at FreeScore explain how credit scores can drastically affect the rate you receive when refinancing your home. This is especially important for homeowners who are trying to lower their monthly house payments. In fact, missing one payment by just 30 days can lead to unpleasant consequences.

A New York Times article that examines a FICO study shows the correlation between late mortgage payments and credit scores for people with a spotless record (780), slightly tarnished record (720) or average record (680):

780 720 680
Payment 30 Days Late 670-690 630-650 600-620
Payment 90 Days Late 650-670 610-630 600-620
Short Sale, No Balance Owed 655-675 605-625 610-630
Short Sale, Deficiency Balance Owed 620-640 570-590 575-595

As you can see, knowing your three credit scores before applying for refinancing is vital to receiving a lower interest rate. If you want to check your scores and stay informed of changes to your credit information, visit FreeScore.com. As the industry leader in credit management and protection services, FreeScore offers the Power of 3: three credit scores, 24/7 credit monitoring and 3-bureau credit alerts. With these and many other exclusive FreeScore benefits, you’ll be empowered to stay on top of your credit and negotiate the lowest possible interest rate.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

Leave a Comment