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Does a good credit score guarantee low interest rate?

Posted on: 04th Nov, 2005 01:57 am
"Does a good credit score guarantee low interest rate?"

A good credit score increases your chances of getting a mortgage at a comparatively low rate. But this may vary from one lender to another because lenders rate you on the basis of your score and they follow various methods for rating borrowers. This is turn affects the mortgage rates charged on your loan.

You may get a home loan even with a poor score but then you may be paying higher rates in return. So, in most cases the higher your score, the lower is the interest rate charged on the loan. When you have excellent credit, you can avail better mortgage rates. If your credit score is very high, lenders will rate you better and you may end up paying less interest rate on a mortgage loan. But with scores below 650, you may be offered a mortgage loan with very high rate of interest.

With a high credit score, you can also get refinance loans or home equity loans at better rates. If you have a score between 720 and 850, then you can get a home equity loan at a relatively low rate. But for the same loan amount, a consumer with a credit score below 650 may have to accept a higher rate.

For a particular lender, a higher score will give you a low rate but if you consider a number of lenders, there's no guarantee as to whether you will get a low rate mortgage with a good score. This is because it is the lender who decides whether your score is "good" or "bad" and they differ in their standards of determining whether a score is better or worse.
What is FICO score?
Posted on: 04th Nov, 2005 02:29 am
Hi Werty

Welcome to the MortgageFit Forums

A FICO score is a credit score developed by Fair Isaac Corporation. It is helps to determine the credit repaying ability of a credit user.

God Bless You,

Thanks,
Samantha
Posted on: 04th Nov, 2005 02:47 am
can u pls tell me if there is any other credit score apart from the fico score?
Posted on: 07th Nov, 2005 12:40 am
Hi Richie,

There is another credit score apart from the FICO score. This alternative credit score is based on a credit report offered by the PRBC Inc. under an agreement with the National Credit Report Association of the United States.

Homebuyers can now avail another credit score if their FICO scores are low enough to qualify for loans at affordable rates.

Know more about this score from the section on Alternative credit score

Hope you will benefit from the information.

Regards,
Caron.
Posted on: 07th Nov, 2005 01:22 am
Both are working for homebuyer or any other things?
Posted on: 24th May, 2009 09:49 am
There are three agencies which track your credit and how you use it.

1.Experian
2. Trans Union
3. Equifax

Your credit score is made up of your past history of payments, how long you have them and how you use them.

35% is made up of Payment history
30% Amoutn you owe
15% Length of history
10% New credit
10% Types of credit

As you can see 65% is made up of Payment history and Amoutn you owe. If you continue to make payments on time and borrow less you will have a good score. But at the same time if you have not had any credit card ot had any loan, then that will not help you at all.

Also types of credit will play 10% in this. So if you have credit card, Car loan and also departmental card, then it will help you to imrpove your score.

But all this will not help, if you do nto make payment on time.

So two things

Make payment on time and borrow with in your limit.
Posted on: 25th May, 2009 07:00 pm
Some mroe thigns to rememebr

Lenders look at many things when making a credit decision including your income, how long you have worked at your present job and the kind of credit you are requesting, in additon to your credit report and score.

Late payments will lower your score, but establishing or re-establishing a good track record of making payments on time will raise your FICO credit score.
Posted on: 25th May, 2009 07:02 pm
do the weightings change for different credit agancies? for example, if you miss a payemnt on a car loan does it have the same affect on your credit score for all the different agencies or do some treat different things as more important?

is there a minimum credit score required for someone (a single person) refinancing your home rather than getting a new loan or second mortgage?
Posted on: 24th Oct, 2011 06:40 pm
Hi creditscoreup!

Welcome to forums!

There can be slight differences in credit scores among the various credit bureaus. If you want an FHA loan, then you will require a credit score of around 600-620. However, if you want a conventional loan, then you will require a credit score of 700-720. It does not change when you're refinancing or taking out a new loan or second mortgage.

Feel free to ask if you've further queries.

Sussane
Posted on: 24th Oct, 2011 10:47 pm
The only credit scores you should really care about are your FICO scores. You actually have 3 of them, but you only have access to your Equifax and TransUnion-based FICO scores.

Provided that the information on your credit reports is exactly the same, your FICO scores should be the same as well. However, credit reports often included different information, which is why your FICO scores can vary depending upon which credit report they're based on.

Talk to potential lenders to find out what FICO score you'll need to get approved for a mortgage. The number will fluctuate quite a bit depending upon which lender you're working with and the type of loan you're seeking.
Posted on: 25th Oct, 2011 09:47 am
A good credit score increases your chances of getting a mortgage, a loan or a refinance at very low rates. However, rates vary from lender to lender because they rate people depending on their financial standing and overall financial capabilities. You are rest assured that you will be dealing the lowest interest rates because you have a good credit score. People with high credit scores are approved of loans and credit much easier thus allowing improving their credit scores much easier as well.
Posted on: 27th Jan, 2013 11:51 pm
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