Financing in New York>Question Details…, Other/Just Looking in New York, NY

How can a good credit history help you?

Asked by jugmendra.links7, New York, NY Thu Jun 28, 2012

How can a good credit history help you?

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The banks lend money based on your level of risk. They assess your level of risk by your credit history. Having a good credit histopry will help you get a better loan product and mortgage rate. Keep in mind, a bank is investing in your ability to pay back a loan. In exchange you are using your home as collateral, that is the definition of a mortgage.


Christopher Pagli
1 vote Thank Flag Link Fri Jun 29, 2012
Credit scores are determined by many things such as pay timeliness, debt, length of time for accounts of extended credit, etc...good credit means that you are a low risk to default and that you pay your debts. Bad credit means you are a risk for overextending yourself and that you buy things but don't pay for them.

You ask how good credit can help....good credit allows you to secure loans or mortgages when needed and allows you to get the best interest rates.
1 vote Thank Flag Link Fri Jun 29, 2012
The better your credit, the more doors open for you. However you also need to prove a current steady income.
0 votes Thank Flag Link Sat Jun 30, 2012
Generally the better the credit, the better the interest rate...
0 votes Thank Flag Link Fri Jun 29, 2012
That depends on the type of loan you are looking for, on a conventional mortgage the interest rates are tiered based on loan to value and credit scores. The difference in the amount of interest from the top tier and the bottom on a $200,000 mortgage today is $42,840. Those are after tax dollars so you would need to earn about an extra $80,000 to pay for the same house. Yeah I know, interest is still deductible, but in the real world the payment is made from after tax dollars,

This is just one example...

Jim Simms
NMLS # 6395
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Fri Jun 29, 2012
A good credit history means a good credibility. In case you wish to take some credit, then this good credit history will help you in getting credit without much hassle. The lenders firstly check your credit report to find out your financial background and if it is good, they do not hesitate in giving lend at a low rate of interest.
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0 votes Thank Flag Link Fri Jun 29, 2012
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