FICO credit scores, which most lenders use to determine interest rates, have been dropping around the country, according to FICO Inc.

One in four consumers, or about 43 million people, now have a credit score below 600, according to FICO. Generally, anything below 620 is considered a poor score, so low that borrowers might not be able to get a loan, even with a high interest rate and additional fees.

If people are unable to get vehicle loans, mortgages or even credit cards, the economy could continue to stagnate without that spending power.

"If individuals aren't able to access credit, it does create a drag on the economy," The first step for anyone who thinks they have a low score is to find out why. Everyone can request one free credit report a year. Once someone identifies which of the five factors in a FICO score are dragging it down, they should work diligently on improving it.

The two biggest factors are payment history and amounts owed. The first, which accounts for 35 percent of the score, is based on things such as making payments on time or past bankruptcies or suits. Amounts owed, which accounts for 30 percent of a score, besides simple totals owed, looks at the proportion of credit lines used.

FICO scores are also made up of the length of credit history, types of credit used and any new credit.

"Low credit ratings will come back to haunt an individual,"

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Mortgage rates drop record low of 4.57 percent.

The average 30-year fixed-rate mortgage has reached its lowest since the 1950's, with a historic 4.58 percent, according to Freddie Mac.

Unfortunately, not everyone qualifies for those rates.

The rates that you see online and are advertised in the paper on occasion are for the absolute optimal situation: a really strong loan to value, the amount of the loan to the value, the appraised value of the property, surpassing high credit scores
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And because home values in mid-Michigan and around the country have lost some twenty percent of their worth the appraised value is the biggest sticking point right now. But there is no harm in looking into your options.
"One size does not fit all," "you have to check it out."

These rates are probably as low as they are going to get.

"There's no question that mortgage rates including fees, are going to go up in the future, so why not take advantage of that right now?."

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Mortgage application rise 7 persent as rate fell.

Mortgage applications rise 7 percent as rate fell

Applications for home loans rose last week as consumers raced to refinance at the lowest rates in decades ever.

Applications to refinance home loans were up 9 percent to the highest level since May 2009. But new mortgages taken out to purchase homes fell 2 percent. The Mortgage Bankers Associations said Wednesday that overall applications increased nearly 7 percent from a week earlier.

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Those applications have fallen in eight out of the last nine weeks, after government tax credits that spurred home sales ended on April 30. Applications were 35 percent below last year's levels.

The average rate for a 30-year fixed loan sank to 4.58 percent last week, according to Freddie Mac. That was the lowest since the mortgage company began keeping records in 1971.

Applications to refinance loans made up 79 percent of total applications, the highest share of refinancing activity since April 2009.Mortgage rates have fallen since mid-April. Investors, nervous about Europe's debt crisis and the global economy, have shifted money into safe Treasury bonds. That has caused the yields on those bonds to fall. Long-term fixed mortgage rates tend to track those yields.

The applicant to refinance made up 79 percent of total application, but the rush to refinance rather than buy homes.