PHOENIX — Mortgage rates just hit their highest point since the year 2000.
While all rates are high right now, buyers with better credit scores are saving.
Even raising your score slightly can mean paying tens of thousands less than someone else.
Using myfico.com's calculator, on the day we checked, a 30-year fixed $400,000 mortgage with a credit score of 620 to 639, would get you an 8.9% interest rate.
But, raise that score just 40 points, and a 7.9% rate saves more than $100,000 over the life of the loan. Same thing with a car.
Looking at a four-year, $25,000 loan, a 630 credit score gets you a 15.4% interest rate.
Raise that score 40 points, and you're looking at a 6.7% rate.
That saves you more than $100 per month and nearly $5,000 over the four years.
So how do you raise your credit score?
The three most important factors making up that score are payment history, amounts owed, and account history.
Payment history is more important, making up 35% of the score.
30 days late can take up to 100 points off your score.
If you are late with a payment, contact your creditor.
If it's a rare occurrence, Nerdwallet.com says you could send a "goodwill" letter explaining a mistake and asking it not to be reported.
If your non-payment is more serious, try working out a payment plan.
Amounts owed/credit utilization makes up 30% of your score.
Try using less than 25% of your credit limit with every account. The less of your limit used, the better.
Choose smaller balances on several accounts over a large balance on one.
And consider asking for higher credit limits.
15% of your credit score comes from your account histories. This is where having older accounts pays off, as long as they have good payment histories.
So, if you're closing accounts, consider keeping older accounts open even if you're not using them consistently.
If you can't get a typical credit card, secured cards build credit by using a cash deposit for your purchase.
Nerdwallet offers more advice on improving your credit score.
Also check your credit report for mistakes and report errors.
You can go to annualcreditreport.com to check your report for free.
Typically, you're allowed one report from each of the three credit bureaus every year.
But until the end of this year, you can request reports every week!
