What Effect Does Your Credit Score Have?

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You do not know that there are many factors considered when you are seeking to get a loan. No doubt one of the strongest factors is your credit score which is a part of your credit report. Do not over emphasize the importance of this however as there are also other elements to your credit worthiness which can be as important if not more important depending on the nature of the loan which you are seeking.

For example your debt to income ratio is incredibly important if you are looking to get a very expensive items such as a home. This is due no amount of good credit will allow you to make a house payment which you simply can not afford. Today we will be discussing the fact that your credit score has on you and your ability to borrow money.

First and foremost your credit-score may work as a cutoff mechanism for certain types of loans. As of the time of this printing it is very difficult to get a mortgage loan from a bank with a score of less than 680. This can change from month to month as circumstances change but that means less than risk for That type of loan. Besides not only will your score affect whether or not you can get a loan but it will also have an effect on the quality of the loan you can obtain.

For example a low credit score may require you to make a larger down payment where as a high score may enable you to make no down payment and pay lower interest rate. If you are buying an expensive item the difference in interest can be extreme as these interest payments add up over time.

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Source by Tuesdaydee Hasson