4 Credit Score Tips to Complete Before You RefinanceIf you're planning to refinance your home, the terms of your new mortgage will depend largely upon your credit score. If you want to access the lowest mortgage rates, you'll need an excellent score. Follow the tips outlined here to maintain excellent credit as you move forward with your refinance. 1. Find out what your credit score is. This is where you need to start. First, find out what your credit score is. If you've made late payments in the past or you've been unable to keep up with debts from time to time, your credit score will reflect this. Check your credit score for any mistakes, as credit bureaus have been known to make mistakes that go entirely unresolved. Make sure your report is accurate and that it's at a satisfactory level. If it isn't, continue reading. 2. Pay off anything and everything you can. Any dent you can make in your current debt load will help you when it comes time to start filling out paperwork for the refinance. Less debt will make your credit score increase. If you've had a hard time paying off debts in the past, there's no better time to get started than right now. 3. Don't open new accounts. You want to show that your credit needs are stable. If you open new accounts, lenders may assume that you're preparing for impending financial difficulties by seeking new credit opportunities. Keep your accounts stable. Don't open or close any in the months leading up to your refinance. 4. Don't try to get your credit "fixed." While there are many legitimate ways to fix your credit and there are many legitimate nonprofit groups and consumer assistance programs that exist to help struggling borrowers, there are far more programs that are simply scams. In addition, being involved in a debt settlement program will reflect poorly on your credit report. One of these programs may help you in the long run, but it won't help you prepare for a coming refinance. Follow these tips to get your credit score in shape before you refinance. You stand to save a significant amount of money if you can use your good credit to qualify for a better interest rate on your new loan. |
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