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How to Get the Lowest Interest Rates

September 15, 2009 | Loans | No Comments
low-interest

In today‚Äôs tough financial world lenders are way more cautious in lending money.  To get the best rate when applying for a loan you must show that you are a low risk.

The best proof is your FICO score.  The higher your FICO score the lower your interest rate.  Your FICO score is the number used by most lenders to determine your creditworthiness.  

If your score is at least 760 out of 850, you will more than likely get the lowest rates.  A person with a 760 FICO score may pay 5.05% APR on a 30 year mortgage.  However, a person with a 670 FICO score may pay 5.67% APR on the same loan.  The difference in interest will be thousands of dollars over the life of loan.

To improve your FICO score consider:

  • Correcting errors on your credit report
  • Paying your bills on time
  • Reducing credit card balances to less than 20% of your limits

 

Additionally, to get the best rates consider paying a bigger down payment; 10% for a car, 20% for a house.

Related Article: How is Your Credit Score Determined?

 

 

 

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