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Elaine Abercrombie: Lower Rates with a Higher Score

For the best deal on a mortgage, first take steps to raise your credit rating

Elaine Abercrombie
Elaine Abercrombie (Roe Anne White photo)

Lenders are an increasingly difficult crowd to please, so if you’re looking for the best deal on a mortgage, you need a couple of strategies to improve your credit score.

Lenders use that number to determine your risk of default, and it may be the single most important factor in your application.

Scores range anywhere from a very risky 300 to a perfect 850. You’ll need a 750 today to get terms a 700 would have gotten you two years ago.

Begin with a $16 investment at, where your three reports from Experian, Equifax and TransUnion are averaged into one representative score.

A Zogby poll reports that one-third of all people who request a credit report find errors. Your score is only as accurate as your information, so scour your report and correct errors immediately. This could boost your score by as much as 200 points!

The largest percentage of your score is determined by your payment histories, but the second largest factor is your “card utilization rate,” or your total balances compared with your total credit limits. Ten percent is the ideal number (such as $2,500 in charges when you have a $25,000 line of credit).

If you correct errors, have an excellent payment history and get your debt-to-credit ratio down, you can expect to save thousands with a lower interest rate on your mortgage.

Elaine Abercrombie, a broker with Abercrombie Fine Homes at Village Properties, is president of the Santa Barbara Association of Realtors. She can be contacted at .(JavaScript must be enabled to view this email address).

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