Holicent
VIP Contributor
To get the best refinance rates for your mortgage, it is crucial to understand your credit report and credit score. Your credit report and credit score are used by lenders as a way of determining how much money they will lend you and at what interest rate. The more favorable your information, the lower your interest rate will be.
The three major credit bureaus — Experian, Equifax and TransUnion — each maintain a database of information about the financial health of people in the United States. These databases are used by many lenders and creditors to determine whether someone has good or bad credit or whether they will be rejected for a loan or credit card.
Each bureau has slightly different scoring systems that assign points to different areas of your credit history: payment history (30 percent), amount owed (15 percent), length of time with the same creditor (10 percent), new accounts opened within past year (5 percent) and new accounts opened overall within past two years (5 percent).
The highest possible score is 850, which indicates that all areas of your file are in good shape and that there's nothing on your record that would prevent you from getting approved for loans from most banks and lenders.
The three major credit bureaus — Experian, Equifax and TransUnion — each maintain a database of information about the financial health of people in the United States. These databases are used by many lenders and creditors to determine whether someone has good or bad credit or whether they will be rejected for a loan or credit card.
Each bureau has slightly different scoring systems that assign points to different areas of your credit history: payment history (30 percent), amount owed (15 percent), length of time with the same creditor (10 percent), new accounts opened within past year (5 percent) and new accounts opened overall within past two years (5 percent).
The highest possible score is 850, which indicates that all areas of your file are in good shape and that there's nothing on your record that would prevent you from getting approved for loans from most banks and lenders.