Refinance Mortgage Rates - Your FICO Score

The FICO Score is the cornerstone of most traditional lending decisions. It is used by almost all the major banks and most the credit services.
Your FICO Score does not reflect the following:

• race
• color
• religion
• national origin
• sex
• marital status
• whether you are receiving public assistance
• whether you are part of the equal opportunity lending participants

Your FICO Score is bought from the three major credit services by the banks, mortgage companies and credit service companies. The range of FICO Scores by company is

• Equifax............300-850
• Experian..........330-830
• TransUnion.....150-934

FICO Scores are calculated as follows:

• Payment history.................................35%
• How much you owe............................30%
• Length of credit history.....................15%
• New credit...........................................10%
• Types of credit used...........................10%

If your FICO Score is too low, then some type of lending institutions that will not offer you a loan. The refinance mortgage interest rate offered by the interested lending institutions will depend on your FICO Score.

Here are some of the factors which affect your FICO Score:

• credit cards at the maximum limit
• a history of only making minimum payments per month
• a large number of recent credit score requests.
• too much new credit assumed
• too little credit history

Here is the effect of FICO Scores. First the median score is 723. If you had a score in the range of 760 to 850 then you would be eligible for a refinance mortgage interest rate of 6.06%. But if your score was in the range of 620 - 639, then the rate would be 7.65%. This example is given not for the concrete numbers, there are just for example, but to illustrate the enormous effect that FICO scores have on interest rates.