Your credit history determines what loans you will qualify for and the interest rate you will pay. Lenders get your credit history by obtaining your credit score. Your credit score is a key determinant of the interest rates you’ll pay when borrowing money.
Many mortgage lenders consider people with a score of 750 or better to be very low-risk clients and therefore offer them their best interest rates. That being said, it might be worth it for you to work at your best before applying for your home loan. Even a small score improvement could save you thousands of dollars a year and tens of thousands of dollars over the life of your loan!
Lenders are more diligent with their lending practices and people with bad credit find it difficult in this times, it’s not impossible for them to get a loan but the interest rates are not going to be low. When considering to purchase a property take it seriously, make the decision and do your best to drive your financing as better as possible. You’ll most likely need to borrow funds from a lender. This is why credit is such an important component to the home buying process.
Remember:
- Better credit scores usually lead to better rates.
- Lower scores do not automatically disqualify you.
- As your credit information changes, your score changes.