Best mortgage rate? Mind your credit scores
If you're thinking about buying a home, these 3 steps can improve your chances for getting a low interest rate.
This post comes from Rose Raymond at partner site Bankrate.
Trying to score good mortgage rates is like playing soccer: There's strategy involved, and you're probably going to break a sweat.
Your credit score plays a major role in the mortgage rate you end up with, and there are steps you can take to ensure you're putting your best foot forward when you go out chasing low mortgage rates.
Check your credit reports. It's a good idea to check your credit reports from the three major credit reporting agencies, which you can do for free at AnnualCreditReport.com. You'll want to do this up to a year before you buy your home.
Scour the reports and be sure to dispute any errors you find. You can do this easily by going to the website of the credit reporting agency in question. The three major agencies are Experian, Equifax and TransUnion.
Don't appear "credit hungry." Avoid seeking new credit while you are home shopping. Seeking auto financing or applying for new credit cards can temporarily bring down your credit score, affecting your mortgage rate offers. Post continues after video.
Mind your credit card balances. The amount of money you owe on your credit cards versus your available credit plays a major role in your credit score. In fact, 30% of your FICO credit score is dedicated to your current credit use. (Estimate your credit score for free.)
Creditors like to see you aren't using all of your available credit. And the good news is your available credit is assessed by credit reporters as much as every month. So if you pay down your balances now, you'll likely see an improvement in your credit score very soon. (How long will it take to pay off your credit cards? Try MSN Money's calculator.)
Mortgage rates remain relatively low, and one of the most painless ways to snag an attractive rate is by simply having good credit. Follow these steps and you could be well on your way to enjoying the low rate of your dreams.
More on Bankrate and MSN Money:
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