How to Get a Better Mortgage Rate
Written by: Andrew Colmes
How to Get a Better Mortgage Rate
From gas to groceries, with the price of everything going up, it's important to get better rates on anything we can. Your mortgage is no different. One of the ways that you can get the best mortgage rates is to improve your FICO credit score. This is the number that is figured from the combined score you have on all three of the major credit bureaus. There are many ways that you can improve your FICO score and get a great credit rating. This will help you with other areas, such as your mortgage. Interest rates will always be higher if you have poorer credit, so building your credit to an excellent rating affords you the chance to receive smaller interest fees and payments. Here is how to do just this.
Obtain a Copy of Your Credit Report
You need to monitor your credit report as well as checking it initially to see what issues you need to clear up. If there are things that are in collections, late payments, etc. your credit report will be affected negatively. Knowing what is on your credit report will help you determine what needs to be done in order to improve your FICO rating. You can obtain a free credit report by visiting www.freecreditreport.com or by requesting a copy of your credit report when you have been denied credit from different creditors. The things you want to look for are items which are in collections, anything that has not been paid, large balances that you owe such as credit card balances, etc.
Handling Debt on Your Credit Report
Should you find unpaid debts or things which are in collections, you need to contact the companies to set up a payment plan. You should know that working through different credit repair companies can sometimes get you a smaller payoff for those debts, however many of these companies have a fee. You can negotiate the payoff for the debts yourself as the creditors often would rather see a percentage of the debt that you owe than nothing. Set up a payment plan with small monthly payments and pay off the debts that you owe. It's very important that you send these payment receipts to all three credit bureaus, as the debts will not automatically come off of your credit report. Once you have paid off the outstanding debts that you owe, your credit will look much better and it will be possible to receive lower interest rates for your mortgage.
Building Your Credit
You can build your credit by paying your payments on time each and every month. Keeping a credit card that you only purchase very small things on and pay it off every month will also do a great job of building your credit. This will allow you to have a higher FICO score as well as reap the benefits of having better credit, such as lower interest rates, better offers, etc. Following this advice will help you receive a lower mortgage payment and many other benefits as well.
