When one is on a lookout for a mortgage loan, their priority is finding the lowest rate of interest. And why wouldn’t it be, an interest is one of the biggest cost a debtor has to incur. Although it is quite tough to anticipate the exact rate of interest you can receive, you can always positively enhance your chances to find the best one.
If you are wondering how you can find the best mortgage rate, then you should be well aware of the following factors that massively affect your loan application.
Credit
In simple terms, a credit score determines your capability to repay the money to the lender. So, a decent credit score elevates your chances of getting a great mortgage rate. Always make sure that you regularly repay your debts, as this will positively influence the creditor’s first impression about you. Also remember that a good credit score will help you gain more options. So, this means that you don’t have to be stuck with unfavorable alternatives and you can always choose what’s best for you.
Down payment
Several lenders will offer you loans without the criteria of incurring a down payment. But this means that you will have the bear the burden of high interest rates. To get low interest rates, if you manage to make a down payment then your lender will understand that the level of risk involved with you is lower and will trust you more. Thus, offering you with a low mortgage rate.
Duration and amount of the loan
If you have a long term loan, then it easily translates into a fact that it is going to involve a high amount of money. So, you can expect if not high, a significantly taxing rate of interest. For instance, a rate of interest of a car will be much lower than a rate of interest for a house.
Chosen rate of interest
There are two main types of rate of interest, i.e. adjustable and fixed. Like the names suggests, a fixed rate of interest won’t fluctuate during the loan term. On the other hand, an adjustable rate of interest will be dictated by current market trends, that means it could go low or high based on the alterations occurring in the economy.
Location
Lenders based in different locations will set a different standard rate of interest depending on factors like demand for loans and popularity of the vicinity.
There are companies that work on collecting and maintaining credit information of consumers. These are known as credit reporting agencies (CRAs). There are three such major CRAs in the country, namely Equifax, Experian, and TransUnion. Apart from these, there are other smaller-scale agencies too that specialize at the job. If you’re worried about “where to get my credit score?,” the larger CRAs are the most reliable bets.
These major CRAs obtain information from companies that you hold business and transactions with. People or companies that lend you money regularly report to these CRAs on your repaying status. There is also detailed information on the amount you are indebted and whether you have ever defaulted on your payments. Aside from the reports obtained from lenders, these companies also tally your general records based on certain other aspects. Some of these aspects are your public records from the local and state judiciary. These include your tax records and bankruptcy information. This information makes up an important chunk of your credit score and its report.
Equifax
Present in 24 countries, Equifax is an agency that offers consumers protection against identity theft and credit fraudulence. They also sell credit reports and credit monitoring assistance to businesses.
Experian
Experian started off in London and is now a trusted agency in 39 different countries. It provides you with a credit score, credit report, and even credit tracker on subscription. The agency uses FICO 8 system of credit score calculation. Experian was a part of Forbes’ “World’s Most Innovative Companies” in 2018.
TransUnion
Based across 30 countries with a database of over 1 billion consumers, TransUnion is another CRA giant. The agency, like the other ones, will provide you with your credit score and your credit reports. In case you decide to freeze your TransUnion credit report, it will also go the extra mile to notify Equifax and Experian, which frankly is a big help especially in case of identity theft and credit fraud.
So, the next time you are sat wondering “where to get my credit score?,” think of these three giants that provide you with an annual credit score and credit report for free once each year. However, if you are looking for more frequent updates, you can subscribe to their services and receive your monthly updates.
Did you know that you have more than a single credit score? Agencies calculate your credit score based on the data in your credit reports. If you are wondering, “where to get my credit score?,” there are three main credit reporting agencies. These can have different credit scores for you if your information on each of their credit reports is different. Also, these agencies charge a fee to reveal your credit score.
Recently, it has become easier to track and get hold of your credit score without paying any fees. You can get it from your credit card company, your loan provider, and even from a non-profit counselor. Here are a few tips you can use to check your score.