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How To Improve Your Credit Score & Get Better Mortgage Rates

Thursday, June 6, 2013 - Article by: Joel - American Financial Network - Message

For home buyers or homeowners nationwide, credit scores can determine how low of an interest rate you qualify for or determine the type of loans available to you.

Borrowers with high credit scores get access to lower mortgage rates and can find the mortgage process to be much smoother than borrowers with challenged credit scores. If your credit score is challenged, here are some simple ways that will help improve it

Get Your Credit Report

Download the most recent report from each of the three reporting bureaus -- Equifax, Experian and TransUnion. The bureaus may reflect one another, but credit accounts -- particularly derogatory ones -- sometimes don't appear on all three bureaus. Ordering reports from all three bureaus is the best option. Note that the bureaus each use distinct scoring forms so your credit scores may vary from one bureau to another.

Check For mistakes

Yes, credit reports are not always accurate. If you find any errors on any of the three credit bureaus which in your opinion is an item or error which does not belong to you contact the bureau asking them to remove the items. Each Credit bureau must be addressed individually

Pay Up

Or, rather, pay down. Be diligent about bringing down your credit card balances in order to lower the percentage of your credit line(s) in use. In general, aim for a 30% ratio or less. An added benefit of bringing down liability is that it can lower your total monthly debt ratios, which can boost your ability to borrower more money.

For errors which are harming your score, such as a 30-day or 60-day mortgage late payments, medical bills, and/or judgments, consider composing a short letter which explains the circumstance that caused the derogatory credit. Such a note won't help your score improve, but it can help your lender make a better credit decision, which can help in "loan exceptions", if needed

Making even minor corrections to an overall credit profile can yield substantial long-term outcomes. It can also help qualify for the lowest rates available during the time of financing.

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