A 700 Credit Score isn't Good Enough When it Comes to Refinancing your Home Loan

By: Stuart Hunter

With interest rates plummeting, homeowners are flocking to lenders with hopes of refinancing their home loans at a lower interest rate and saving loads of cash in the process. On a $250,000 30 year loan, refinancing from an 8 interest rate to one of the great interest rates in the 5 range that were reported in early January, 2009 would reduce monthly payments by nearly $500. Over the course of the entire loan, this amounts to over $170,000 worth of savings.

Most people, however, will not even be able to qualify for a refinance loan and an even larger percentage will not be able to get approved for the best interest rates.

Having a better than average credit rating simply isn't enough when it comes to getting the best rates on a refinancing loan. Most people consider a 720 credit score to be a good score, says Chris Freemott, president of All American Mortgage, but to get the best possible interest rates , borrowers will need a credit score of 740 or higher.

Traditionally, consumers looking to increase their credit scores have been searching for a way to turn a poor credit score into an average credit score or better. By taking credit scores in the 500 range or lower and increasing them to the mid to high 600s, people discovered that they were able to dramatically improve their quality of life. They were able to get approved for mortgage loans that were previously denied to them and qualify for auto loans or credit cards with reasonable and manageable interest rates.

Today, it is not just those with bad credit scores who could see benefit from credit repair or other credit improvement services. As is evidenced by the current home loan situation, even those with average credit scores may be able to benefit from pushing their credit scores even higher.

If you are looking to take advantage of the low interest rates, take some time to investigate a variety of lenders and shop around for the best rates. And don't get discouraged if you are turned away by one lender because there may still be another who will be happy to work with you. And if lenders are consistently turning you away or not offering the interest rates you want because of your credit score, then making use of credit correction services like those provided by Lexington Law may be the first step you need to take in order to reach your goals.

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There are steps you can take to improve a poor credit report. To find out if credit repair may be a good solution for you, Lexington Law offers a free, personalized credit consultation. You can receive your consultation by calling 1-800-214-0922.

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