FICO Scores and Interest Rates
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Credit scores can also affect how much you pay for your loan, too. Example: A 30 year fixed mortgage for $100,000, with a credit score of 720 - 850, your interest rate could be 5.778%, you would pay about $110,727 in total interest. A credit score of 500 - 559, your interest rate could be 9.236%, you would pay about $195,798 in total interest. That is a difference of over $85,000, the higher the score the more money you could have in your pocket.
Running Credit Reports
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Do not allow mortgage lenders run credit reports on you until you know which lender you are going to use. You will probably need to explain any credit inquiries in the last ninety days and numerous inquiries will lower your score.
When Buying a Car Can Hurt!
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Don't go and shop for or purchase a new car or anything else on credit. One reason it will show new inquiries on your credit report. Another reason the new car payment will probably raise your debt-to-income ratio, lowering your maximum purchase price.
Protect Your Credit History
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Credit scores are important if you want to get the best interest rate available. Protect YOUR score.
Do not open new revolving accounts needlessly.
Do not fill out credit applications needlessly.
Do not keep your credit cards nearly maxed out.
Make sure you do use your credit occasionally.
Always make sure every creditor has their payment in their office on the date due or before.
Never be more than thirty days late on your mortgage.
Correcting errors on a credit report
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Under the FCRA (Fair Credit Reporting Act), both the CRA (consumer reporting agencies) and the organization that provided the information to the CRA, such as a bank or credit card company, have responsibilities for correcting inaccurate or incomplete information in your report. To protect all your rights under the law, contact both the CRA and the information provider.
First: Tell the CRA in writing what information you believe is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request deletion or correction. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the sample below. Send your letter by certified mail, return receipt requested, so you can document what the CRA received. Keep copies of your dispute letter and enclosures.
CRAs must reinvestigate the items in question, usually within 30 days, unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so they can correct this information in your file.
Disputed information that cannot be verified must be deleted from your file.
If your report contains erroneous information, the CRA must correct it.
If an item is incomplete, the CRA must complete it. For example, if your file showed that you were late making payments, but failed to show that you were no longer delinquent, the CRA must show that you're current.
If your file shows an account that belongs only to another person, the CRA must delete it.
When the reinvestigation is complete, the CRA must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the CRA cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the CRA gives you a written notice that includes the name, address, and phone number of the provider.
Also, if you request, the CRA must send notices of corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, you can give "your side of the story" in 100 words or less and the CRA must include your statement of the dispute in your file and in future reports.
Second: In addition to writing to the CRA, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any CRA, it must include a notice of your dispute. In addition, if you are correct, that is, if the disputed information is not accurate, the information provider may not use it again.
Contact the Credit Bureau for Your Credit Report.
Equifax: ( 800 ) 685-1111
Trans Union: ( 610 ) 690-4909
Experian: ( 800 ) 682-7654
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