The relatively new concept of “risk-based pricing,” is now happening in the mortgage industry. The idea is that a person’s credit score plays a major factor in the interest rate charged. The better your credit rating, the lower your interest rate. This makes it important for us, as consumers, to improve our credit before seeking mortgage or other loan approval.
The good new is that the process is controlled by the US – we have power over our credit ratings! If a Lender is unwilling to lend, or the rate is too high … we can get a better rate by cleaning-up our credit.
I believe that good credit scores will be of increasing importance in obtaining favorable interest rates. It just makes sense! This means – we, as consumers need to pay attention to our credit reports! We should review the three national credit reporting agencies — Experian, Equifax and TransUnion files periodically. Discrepancies should be corrected. And, if there are negatives on a credit report, consumers should take advantage of the Fair Credit Reporting Act (FCRA) to file a dispute. Unless the credit agencies can validate the problem, they will have to remove the item. One way to increase a credit score is pay off credit cards, but leave them open— this leaves more available credit, and a longer credit card history, both of which actually increase your credit score.
To obtain a free credit report, you can go online, to the FTC Website or call (877) 322-8228. And, for those inundated by pre-approved credit cards, (which can lower you score, because credit bureaus know when a bank has pulled a credit report before making the offer) there is an opt-out service at the www.FTC.gov Web site or call 1-888-5-opt-out. (It’s similar to the do-not-call registry.) The opt-out is good for five years, and within about 30 days some of that pre-approved junk mail should cease. But beware, many of those reportedly “free credit report” sites have strings attached, and are not really free.
[...] mosaicodelivrosfsm.org wrote an interesting post today onHere’s a quick excerpt The relatively new concept of “risk-based pricing,” is now happening in the mortgage industry. The idea is that a person’s credit score plays a major factor in the interest rate charged. The better your credit rating, the lower your interest rate. This makes it important for us, as consumers, to improve our credit before seeking mortgage or other loan approval. The good new is that the process is controlled by the US – we have power over our credit ratings! If a Lender is unwilling to lend, or [...]
[...] Risk Based Mortgages Posted in March 31st, 2008 New Risk Based Mortgages – we have power over our credit ratings! to good way to increase a credit score is to pay off creditcards, but leave them open— good tip, that way it shows a history of good credit; [...]
[...] New Risk Based Mortgages. And, for those inundated by pre-approved credit cards, (which can lower you score, because credit bureaus know when a bank has pulled a credit report before making the offer) there is an opt-out service at the http://www.ftc.gov...
[...] New Risk Based Mortgages To obtain a free credit report, you can go online, to the FTC Website or call (877) 322-8228. And, for those inundated by pre-approved credit cards, (which can lower you score, because credit bureaus know when a bank has pulled a credit … [...]