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How to Get the Best Mortgage Interest Rate (Without Negotiating)

Credit Scores

How to Get the Best Mortgage Interest Rate (Without Negotiating)

The difference between having a 739 and a 740 credit score translates into money lost. If you take out a $180,000 mortgage, that one-point difference has you paying $222 more each year. Tina Russell/Codetic

Did you know five credit score points could cost you $15,000?

That three-digit number has so much power over our finances. Yet when was the last time you sat down with your credit report? Heck, when was the last time you even checked your credit score?

It doesn’t have to be some big chore. You can do it right now — for free and from your phone — through Credit Sesame. Check your score, tap into your credit report and read customized tips to help improve your credit health.

It takes 90 seconds to get started… and it could save you thousands of dollars.

Five Credit Score Points Cost This Couple $15,000

JP Clayton is a 30-year-old software consultant from Sarasota, Florida. In September 2017, he and his wife, Ashley, purchased their first home.

The process was, well, a bit painstaking.

“We knew our credit scores were important but had no idea that a five-point difference could be so significant to a loan in the long run,” JP says.

His credit score wasn’t bad, but it did have an old error he’d never gotten around to fixing. Then, because the couple lost several homes to other buyers after applying for preapprovals, his score took a slight hit from multiple hard inquiries in a short span of time.

When they finally found The Home, their mortgage lender called. JP’s score had dipped five points below where it needed to be to lock in the 3.75% interest rate they’d budgeted for. The Claytons were forced to settle with a 4% interest rate.

This quarter-percent jump would cost them $15,000 over the life of their 30-year loan.

Shape Up your Credit Score Before Any Big Purchase

A woman checks her credit score on the mobile version of Credit Sesame outside of her house.
You can check your credit score with Credit Sesame before applying for a mortgage. It’s free, and checking your score won’t affect it. Tina Russell/Codetic

It’s not just your mortgage. Your credit score can affect your car loans, personal loans, student loans and credit card interest rates.

Basically, it influences any big purchase you’re going to make in this lifetime — and like the Claytons, even five points can make a big difference.

If you want to make sure your credit score is in tip-top shape, get a free credit report card from Credit Sesame. Just sign up for an account — it takes 90 seconds — and you’ll gain access to a wealth of easy-to-understand credit insight.

You can see what you’re doing well and what might need some TLC. Then, Credit Sesame will outline exactly what you need to do to increase your score.

You might start seeing progress quicker than you think.

We spoke with James Cooper, who raised his credit score nearly 300 points in just six months by using Credit Sesame’s recommendations.

“They showed me the ins and outs — how to dot the I’s and cross the T’s,” Cooper says. “I applied for my first credit card ever.”

So, sure, you might think, “Oh, no big deal. It’s five points.” But those five could cost you thousands over time, so take a few minutes to get your credit score in check.

Carson Kohler ([email protected]) is a staff writer at Codetic.

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