Daniel from New York wrote into CNBC’s “Ask The Experts” feature with the following question:
“Are there ANY credit repair companies that are legit? I’ve used a couple and both times they have been scams. I obviously won’t do it again but people should be aware if they are all trying to rip you off!!”
His concern is valid. There are all too many credit repair clinics out there who are much more interested in separating you from your cash than in helping your credit situation. But the response he received is even more concerning.
In her response to Daniel’s question, Carmen Wong Ulrich host of the program “On the Money” states:
With mortgage rates plummeting, homeowners are flocking to lenders with hopes of refinancing their home loans at a lower interest rate and saving loads of cash in the process. On a $250,000 30 year loan, refinancing from 8% to the record lows in the 5% range that were reported in early January would lower monthly mortgage payments by nearly $500. Over the course of the entire loan, this amounts to over $170,000 worth of savings.
Most people, however, will not be able to qualify for a refinance loan and an even larger percentage will not be able to get approved for the best interest rates.
Having a good credit score simply isn’t good enough when it comes to getting the best rates on a refinancing loan. Most people consider a 720 credit score to be a good score, says Chris Freemott, president of All American Mortgage, but to get the best rates, borrowers will need a credit score of 740 or higher.