Yesterday I found an article about credit scores and mortgage rates on MSNBC. And the headline was actually depressing. It’s says:
“Great credit may not get you a great mortgage
Rates for excellent rating not much better, if you can actually get a loan”
The author, Eileen Connell, makes her point in the first three paragraphs of the article:
“The mortgage loan interest rates offered to borrowers with stellar FICO scores aren’t much lower than the rates offered to those with a middle-of-the-road 720 score these days.
That means that efforts to drive up a credit score to lofty heights aren’t likely to produce substantial savings over the life of the loan.
The real savings comes from getting your score to that magic line of 720.”
Later in the article, she makes some other good points:
“But if you’re already at 720, the benefits start to dwindle as you improve your score further. There are still incremental rate reductions for borrowers in the higher range, but they won’t see the same level of drop-off that improvements lower on the scale can produce.
Part of the reason for so little change for the top borrowers is that interest rates are so low overall. “There’s not that much room right now between the rates,” noted Diane Winland, a financial planner with Financial Finesse, based in Manhattan Beach, Calif.
Another potential factor is that consumers with “perfect” credit scores tend to be less profitable for banks than consumers with a few dings on their histories, who pay higher rates and often penalties like late fees.
Consumers with great scores by and large avoid credit, explained John Ulzheimer, president of consumer education for the website Credit.com. “They have credit, they have had credit for a very long time, but they’re definitely a small-time user of credit. Which means that they’re not very profitable.”
Christine here: I think this article makes it clear that credit, especially lending for mortgages, is still difficult to get for any borrower and if you’re anywhere between 620 and 720, forget about it unless you do some credit repair first.
Click the link at the top of this page for professional help or your can do it yourself using the tools on this blog.
DISCLAIMER:
****CHRISTINE SPRINGER IS NOT A LICENSED ATTORNEY OR FINANCIAL ADVISOR. THIS BLOG IS COMPRISED OF HER OPINIONS, OBSERVATIONS AND INTERPRETATIONS AND IS NOT INTENDED TO BE CONSTRUED AS LEGAL OR FINANCIAL ADVICE. PLEASE CONSULT WITH AN ATTORNEY OR FINANCIAL ADVISOR BEFORE RELYING ON OR TAKING ANY ACTION BASED ON THE INFORMATION IN THIS BLOG.****
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