How does credit affect interest rates?

Interest rates have a big impact on the cost you pay for borrowing money. Having a low credit score will have you paying large amounts of interest on any car loan, mortgage, or credit card. An excellent credit score will save you large amounts of money because more of your money is going to the principal of your loan and less to interest.

Your credit score ranges from 300 to 850. Higher credit scores are best because they indicate that you’ve handled credit well in the past and you’re likely to pay new credit on time. Lower credit scores demonstrate that you’ve made some big mistakes in the past and that you may not make all your payments if you’re given new credit.

Banks set interest rates (the APR or annual percentage rate) based on the risk you pose. The higher credit risk you appear to be, the higher your interest rate will be. (Or, if your credit score is really low, you may be denied.) On the other hand, if you have a low credit risk (represented by a high credit score), you’ll typically qualify for a lower interest rate.

We work hard and strive to deliver great results with our clients’ credit and debt goals always in mind. That is what makes us your ONE stop shop for all your credit and debt needs. Call us at 844-FIX-URCR or visit us at 6416 Gateway E.

*Individual results may vary. Please call for more details and to discuss your own individual situation.

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