Is you lackluster
credit score negatively affecting the interest rate on your home loan? Chances are it is, but you may not know why. However, the newly passed Dodd-Frank Wall Street Reform and Consumer Protection Act, will help homeowners become more informed about their credit score and its implications for taking out a loan. A recent Equifax Finance Blog explains the different types of notices you might receive when taking out a loan in the article,
“Are You Receiving the Best Interest Rates on Your Loans?”
Under the new act, lenders will be required to provide consumers with a risk-based pricing notice explaining why you don’t qualify for better rates and how you can obtain your credit report. These notices are useful in helping buyers understand how their credit score affects their loan rate, but it also provides an opportunity to review and fix credit score mistakes before agreeing to a higher interest rate.
The two notices that you will receive if given less than favorable loan terms are the risk-based pricing notice and credit score disclosure notice. The risk-based pricing notice includes your credit history, the credit reports used to determine the terms of your loan, the reason behind your loan terms and information on finding and fixing your credit report. The credit score disclosure notices is an alternative way lenders comply with the risk-based pricing rule; this type of notice is sent to all consumers who apply for credit, and it contains their credit score along with how it was used to evaluate their creditworthiness.
You should receive these notices as the time you are approved for a loan. If you aren’t qualifying for the best rates, start taking steps to
improve your credit. If you aren’t receiving the best possible rates and you don’t receive these notices, file a complaint with the Federal Trade Commission.
For more on the Dodd-Frank Wall Street Reform and Consumer Protection Act, read the full article on the Equifax Finance Blog. The blog also is a great resource for financial information regarding taxes, insurance, real estate and more.