Home Improvement Loan Tips

Mind Your Credit

1. In today's economic climate, banks are more reluctant than ever to provide credit to what they consider "high-risk" borrowers. Though interest rates on all types of loans are at an all-time low, and it could be a great time to borrow from your home equity, if you don't have a great credit score, you will have a tough time convincing lenders to give you a loan. The best thing you can do before looking for a loan is to monitor your own credit score, and do what you can, to increase your score before applying. Many online companies offer credit-monitoring services for a low fee, and if you have been turned down for a loan because of your credit, you may be able to receive a free copy of your credit report from one of the three credit reporting companies -- Equifax, Experian and TransUnion -- which most banks use to make their loan decisions.
   To get the best rates, your score will need to be in the 800-900 range, though a good credit score is generally over 700, but even if your score is as low as the mid-600s, you may be able to get a higher-rate loan from banks that specialize in high-risk loans. If your credit score is 500 or below, you will need to take action to improve your credit before applying for any loan.