Boosting your credit score to receive a good interest rate is well worth the effort, mainly due to the amount of monthly savings that is realized through a stronger credit score.
When it comes time for lenders to approve your home loan they have a chart they look at, and on that chart there is a credit score range and a corresponding interest rate right beside the range.
The higher the credit score, the lower the interest rate on the chart.
For example a score range between 660-720 may have a corresponding interest rate of 6.
5% for a 30-year fixed interest rate and 720-800 may also have a rate of 5.
5% for the same 30-year fixed interest rate.
Assuming the home was being sold for $200,000 the person that receives the interest rate of 6.
5% would be paying $1264.
14 on a monthly basis while the person that receives the rate of 5.
5% would be paying $1135.
58.
Over the course of 30-years you are talking thousands of dollars in savings.
The first step to boost your scores to get a good interest rate is to make sure you begin the credit improvement process well in advance of home shopping.
Most people don't realize they may need to boost their scores to get the rate they want but the unfortunate part is that they don't have enough time due to the time it takes to boost their scores.
In order to dispute negative accounts on your report, the process involves you writing letters to the agencies, they would then need to conduct an investigation of your dispute with the creditor which can take anywhere from thirty to sixty days.
The good part is that they have thirty days by law to conclude their investigation and report their findings back to you.
If they cannot complete it in thirty days the negative information needs to automatically be deleted from your report.
Each dispute should be sent to them separately so if you have multiple disputes you are looking at a timeline of at least a couple of months.