The All Important Credit Score

Mortgage rates have dropped considerably in the past several days in the aftermath of the federal government's takeover of Fannie Mae and Freddie Mac. The average rate on a 30-year fixed mortgage were hovering around 6.375% a week ago. Now, it's around 5.75%. On a $300,000 mortgage, that's a monthly payment difference of $122. Over the course of the 30 year loan, it's a difference of nearly $44,000.

But today's lower rates are only available to those with a credit score of above 740 and are making a 20% down payment. A slightly lower credit score will still get you a great mortgage rate, but you might be missing out on some savings. All that is needed is taking a look at your credit report and seeing what can be fixed. A simple fix like closing unused credit cards will go a long way increasing your credit score.

Taking a look at your credit report is an important first step towards a lower mortgage payment. There's many great websites out there that will run your credit report, and I've found this site particularly helpful.