Raise Your Credit Score-Lower Your Interest Rate

October 28, 2008

Ever wonder why you got turned down for that loan you just knew was a lock? Well, the answer could lie in your credit score.

Lenders use your credit score to determine if you are a good or a bad credit risk. If you have a low credit score you are less likely to be approved for a loan. If you get approved it will likely have you paying a higher interest rate than if you credit score was higher. Before you apply for a loan or any type of credit, get a copy of your credit report, so you won’t be unpleasantly surprised.

It would be great if you knew exactly how your credit score was calculated, wouldn’t it? Well, there is no way you can find out the exact algorithm, but there are some general things that are known to affect your credit score: payment history, bankruptcies or collections, percentage of credit limit owing, length of credit history, number of inquiries.

Find out more about how these things affect your credit score.