Money Talks News: Mortgage Tip Can Save You $50,000

Trying to rack up the best deal on a mortgage? Before you play this game, understand how it works.

Single best tip? Before you apply for that mortgage, I'm talking a year before, check your credit history and credit score. Because when it comes to getting a mortgage, those things aren't the main thing - they're the only thing.

Say you're looking for a $200,000 mortgage. According to FICO, when we shot this, A score of 620 means paying 5.7 percent on a 30 year loan. But a 760 credit score qualifies you for 4.1 rate.Difference over the life of the loan? $52,000.52 grand: this is enough to put your kids through college, start a business, retire early. It's important. So if you're starting off with a low credit score, here's you: behind the 8 ball. Clean up that credit.It's the single most important thing you can do before you get in this game. Step one? Go to and get free copies of your credit history. Dispute any inaccuracies.

Step two? Pay down your debt. You shouldn't be using more than 30 percent of your available credit.

Step three? Don't close old accounts: the longer your credit history, the better.

Step four? Work it. Pay your bills on time, all the time. Even one late payment on your credit history is one too many. Final step? Avoid new credit.

Now, is all this going to take time? You bet it is. But if you want to pocket an extra 50 grand, it's time well spent.

Now what you need is some tips to help you clean up that credit history and get a higher credit score, and they're waiting for you right here at

Just do a search for "credit score."

For Money Talks News, I'm Stacy Johnson.