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As you are likely aware, the better the credit score, the better rate you can receive on mortgages, home improvement loans, lines of credit, and other lending. This is because banks and other lenders view you as low-risk. You have managed to avoid defaulting on other payments, while also increasing your borrowing capacity, maintaining a steady income, and overall handling your financial affairs in a very healthy and responsible manner. If you have a credit score in the 700, 750, or 800+ range, mortgage brokers and agents are going to be thrilled to work with you.
What you may not realize is that even slight variations among high-credit-score holders can have an impact on the options you are presented as a prospective home buyer or borrower.
If your score is around 700: You are seen as being in the low range. 800 plus is seen as just about perfect, so being in the 700 range will certainly make you a good candidate for fairly low rates and easy-to-access lending. However, there is still some room for improvement, and it is worthwhile to take some time, evaluate your reports, and make sure that you have done everything you can to boost that number before applying for a loan. First, consider whether or not your report is accurate. If you can prove errors, you may be able to improve your situation considerably. Common things to look for are family member's names being confused with yours or late payments being cited when you have evidence that you paid on time.
If your score ranks around 750: Still an excellent score, 750 is nearing perfection. You will be eligible for some of the best rates available, and you will certainly not have to worry about things like subprime lending. Most banks will be elated to have you on board because they will view you as a responsible, low-risk borrower. You can expect to secure great rates no matter where you go for a loan. However, take care to realize that a high score does not necessarily translate into the money you need to purchase whatever you may want. You still need to consider your income and other bills before taking out a huge loan, as you don't want to hurt your score later on by defaulting on something as big as a mortgage.
If your score ranks at or above 800: Pat yourself on the back. You have a well-balanced debt-to-credit ratio, and you have been exceedingly meticulous in paying back your bills and other obligations. Your reward will be the lowest possible interest rates and the most flexible lending options available in the current market. While this doesn't mean you can buy or borrow to your heart's content, it does mean that you will pay less than others for the same purchasing power. It also means that you shouldn't have to worry about points or other undesirable things like being subprime.
If you can't boast having one of the above high scores, that's okay. In time, the more you borrow and return responsibly, the better off you will be. Someday, you too could have the ability to take the lowest rate mortgage!
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