Credit Scores And Your Interest Rates

Credit Scores And Interest RatesAs we already established having a good credit score not only enables you to get loans from lenders, but more importantly it reduces your annual interest rates quite significantly.

The tables below will show you real examples on exactly how a particular credit score affects your interest rates on mortgages, equity loans or auto loans.

30 Year Mortgage:

Credit Score Interest Rate
500-549 9,758%
550-579 9,077%
580-599 8,747%
600-619 8,305%
620-639 7,359%
640-659 6,814%
660-679 6,383%
680-699 6,169%
700-759 5,993%
760-850 5,771%

15-Year Home Equity Loan:

Credit Score Interest Rate
620-639 12,812%
640-669 11,566%
670-699 10,059%
700-719 9,287%
720-739 8,787%
740-850 8,487%

4-Year Auto Loan:

Credit Score Interest Rate
500-589 15,112%
590-619 14,443%
620-659 11,019%
660-689 9,478%
690-719 7,983%
720-850 7,179%

Once again this proves just how important maintaining a high credit score is. In the first case (30 year mortgage) the difference between the lowest and highest credit score is 3,987%. Since this type of loan is substantial the money you can potentially save simply by having a lower credit score is definitely nothing to laugh at.

In the second case (a 15 year home equity loan) you’ll be paying a 4,325% higher interest rate with the lowest possible score. Finally, on a 4 year auto loan you will have to pay double interest rate (7,933% higher) in case your score is between 500 to 589.

I strongly suggest that if you still aren’t giving enough attention to keeping your credit score high that you start doing it immediately. You can start by reading our articles about improving your credit scores which will give you enough tips to start with. Reducing your negative balance and paying bills on time are just some of the easiest ways to start improving your score as soon as possible.

This entry was posted in Credit Score Basics and tagged , , , , . Bookmark the permalink.

Comments are closed.