While many consumers know a good credit score is capable of getting them approved for new credit card offers, some are unaware that it can substantially impact the price of a mortgage.
As a result, many consumers fail to repair their credit before they begin the home buying process. This means they may see prices based on inaccurate and unfair scores from credit bureaus, which may result in individuals paying more than may be necessary for a loan.
For example, on a $300,000 mortgage loan, a 120-point difference in a consumer's FICO score can save them roughly $300 dollars each month. Over the lifetime of the loan, this can add up to as much as $100,000 in unnecessary payments, MSNBC reports.
A 120-point difference on a standard FICO score may sound like a lot, however, moving up from bad credit to good credit can be as simple as removing an error from a credit score. Many credit reports contain errors such as improper delinquencies, which if successfully disputed may boost a consumer's credit standing.
As a result, consumers who are thinking of buying a home may benefit by contacting a credit repair organization, as these companies may be able to help consumers navigate the process and prepare for a dispute.