For those who haven’t heard of credit ratings before, it is basically a lenders way of deciding how safe it is to give you their money! The lender scores you on a set criteria (which is never published) to see how credit-worthy you are.

It’s based on a number of things such as your borrowing and repayment history, any CCJ’s, any current credit agreements, time at address, and whether you are on the electoral role.

So……..what’s next?

Firstly, I would highly recommend getting a free credit report from Equifax.
I started by getting a free trial, and now I find it worth my while to subscribe to a credit reference service so that I can check my report at any time. It lets me see outstanding credit balances that I have, and also allows me to ensure that no one has set up any borrowing facilities fraudulently in my name.

Once you have looked at your report, then why not purchase their score report, which actually scores you…so you know how likely you are to get accepted for credit.

So how to improve my score:

1) Ensure you are on the electoral roll, and this is reflected in the Equifax report

2) Ensure all of your lenders have your current address

3) If you have any unused credit facilities, such as credit cards which you have paid off the balance, then shut it down. If you have credit available to you then you may be less likely to be approved for future credit.

4) Ensure you do not default on payments. If you have a secured loan then you may find yourself losing your house – which is far worse than just having a bad score!!! Make your monthly payments on time.

5) Be careful who you “get into bed with”! If you decide to set up a joint bank account with your loved one – then ensure they have a good credit rating! Once you set up a current account, or get a mortgage with someone, you then become financially linked. So beware!

6) Don’t apply for lots of finance loans within a short space of time. If you get rejected, then wait a few months before re-applying. This can seriously mess up your score, and happened to me a few years ago.

So, what are you waiting for? Visit Equifax and make the most of their free trial. I found a free trial so helpful in sorting out my finances, spotting errors, and ensuring I maximised my chances of getting the unsecured loan I required to buy my motorbike!

There are several reasons that people may look to refinance home loans. Probably the most common is to take advantage of lowered interest rates. Some of the other reasons people refinance home loans is to pay off high priced credit cards, make home improvements, and rebuild credit rating that has taken a turn for the worse.

What is involved when borrowers look to refinance home loans? When you refinance you normally just pay off the old mortgage and sign a new mortgage. Now this will also mean most of the same costs you had when you signed the original mortgage. Depending upon your State or the terms of your mortgage you may pay a penalty for paying the note off early.

Individuals who refinance home loans look at several things before doing so. Look for a company that may be willing to waive the normal fees. These include such things as an application fee, legal fees and appraisal fees. This are all normally associated with closing fees on a new mortgage. This could save thousands of dollars. It would give you a higher monthly payment but this could be still acceptable with a small rate decrease.
How long do you plan on staying in your home? If the answer is just a few months the monthly savings may not have time to catch up to the costs involved if you were not able to secure a loan from a company who will refinance home loans but will not waive fees involved. What are the new rates? As a rule try and find a rate that is minimum 2 points below your current mortgage rate.

Some who refinance home loans do so with the intention of building equity in their home faster. Now with this type of loan your month cost will be higher even with a lower rate. The benefit is you build equity faster and pay less interest over the length of the mortgage. If you wanted to refinance a 30 year mortgage to a 15 but the cost was to high you may want to check about a 20 year mortgage to still be able to take advantage of the lower rates.

The last important point to remember with companies who refinance home loans. Try and get a guarantee on the rate so that it is locked in during closing. This will keep the rate the same even if it should go up prior to your closing. You could even try and see if they will agree to a rate decrease if that should occur before closing. The refinance of home loans is competitive enough that if a company will not do either of those option. You may want to check with another company. The ultimate goal is to reduce your payments or to increase the equity of your home in a shorter time.