Your Credit Score and Refinancing Your Mortgage

Many homeowners are unaware of their credit score and how it can impact refinancing their mortgage. When applying to refinance your mortgage the lender will review your credit history and score. The outcome of this review will determine if your loan is approved and will influence the interest rate you will pay.

Mortgage lenders rely heavily on credit scores; this streamlines the process of approving loans. The mortgage lender will first run your credit score. If your credit score falls below the lender's minimum requirement they will not process your application and you will be denied.

There are a number of factors on your credit report that determine your credit score. Credit scores range from 300 to 850. When it comes to credit scores, the higher your credit score the better your credit rating. It is not difficult to improve your credit score; you can get a higher score by keeping your credit card balances low and making your payments on time.

Your credit score is based on your outstanding debts, the length of your credit history, making payments on time, and the number of credit inquiries on your record. Anytime you apply for credit and a lender checks your score this is counted as an inquiry. Your payment history is important because a potential lender wants to know if you will make your payments in a timely manner.

There are a number of steps you can take to improve your score. Making your payments on time is the best way to boost your number. Your payment history accounts for nearly 40% of the calculation. Paying off your credit cards will also quickly improve your credit score.

Taking the time to improve your credit score prior to refinancing your mortgage could save you a lot of money in the long run.

Louie Latour has twenty years of experience in the mortgage industry as a mortgage broker. He is the owner of Mortgage Refinance Advisor, a mortgage resource site devoted to saving homeowners money with a free guidebook Five Things You Need to Know Before Refinancing a Mortgage. http://www.refiadvisor.com

See Also:

Credit Score - Reporting Your Financial Health
Credit score is one of the most basic, determining factor while loan borrowing. Credit score is the criterion for the creditor to ascertain whether to give you credit or not. Credit score is a powerful tool, if you what it is. Credit score is a three digit number which is consequential enough to ... more...

Credit Score Repair The Higher Your Score, The Better For Your Credit
Credit score repair means that you want to take steps to improve the credit score you have on your credit report. A good credit score means that creditors see you as a good risk to repay the money you borrow. The higher your score, the more loans and lower interest rates you are likely to qualify ... more...

Credit Scoring: What You Don't Know Can Hurt You
You've probably heard the term credit scoring. You may have some idea that your credit score can have an effect on your life. For example, you may understand that when you apply for a mortgage, the mortgage company will check out your credit score.But did you know that the interest rate you can get ... more...

Credit Score for Scoring the Right Loan
Somebody once said, There is always a way of knowing your limitations and going beyond it. It is fundamentally true with respect of credit score. There can be nothing more rewarding during loan borrowing than knowing your credit score. There are many people who are practically unaware of what their ... more...