Know your credit score

Every time you complete an application for credit (mortgage, credit card, car loan, etc.), the lender must decide if they will grant you the loan.  Your credit score plays a big role in their decision-making process because it reflects your overall credit history.  In other words, it shows the lender your track record in terms of repaying debt.  You actually have three credit scores, one for each of the credit bureaus - Experian, TransUnion, and Equifax. Each credit bureau maintains a file about your credit history.  Over time, the information in your credit history changes & your credit score changes based on how you handle re-payment of debt owed. 

Your credit score will largely determine:

  • how much money a lender is willing to loan you
  • what rate of interest you will pay on a loan
  • the length of time the lender is willing to give you a loan

What makes up your overall score?

                             

A higher credit score usually means a lower interest rate on your next loan, and that saves you money!  How much of a difference does it make?  Check out the following example for a 30 year fixed mortgage on a $100,000 loan*:

Credit Score (FICO)

Annual Percentage Rate (APR)

Monthly Payment

760 - 850

6.297%

$619

700 - 759

6.517%

$633

660 - 699

6.798%

$652

620 - 659

7.599%

$706

580 - 619

9.477%

$839

500 - 579

10.312%

$901

Working to improve your credit score just to gain a quarter or half a percentage point doesn't sound like much at all in this example.  But consider that a credit score of 760 vs. 660 will mean:

  • Saving an extra half a percentage point on your interest rate
  • Save you more than $11,800 in interest charges over the life of the loan
  • Reduce your monthly payment by $33

Obviously, well worth the work.  And as a member of ACMG, you are entitled to free credit counseling and advice - just ask to speak with an ACMG Loan Officer.  

*This example is based on a state-wide average of interest rates and does not reflect current ACMG loan rates. Please contact any experienced loan officer to receive the daily mortgage rate or visit our current rates page for other loans.