Credit Scores, Interest Rates, and You

Credit Scores are one of the main factors in making financial decisions. We’ve compiled information from our resources and have put together a basic set of guidelines that may help you determine where you stand in terms of credit.

Want to know where you stand? Check your credit score now!

This guide assumes that you meet other requirements, such as:

  • Enough money for a down payment (at least 20% of the overall cost of the product, service, etc.)
  • Additional savings
  • Income totaling at least three times the amount of the total payment (which relates to your debt-to-income ratio)

With the requirements above kept in mind, here is how your credit score may affect your interest rate:

  • Excellent (760850): Your credit score will have no impact on the interest rate. You will likely be offered the lowest interest rate available.
  • Very Good (700760): Your credit score will have little to no impact on your interest rate. You will likely be offered an interest rate approximately 0.1%–0.25% higher than the lowest rate available.
  • Good (660699): Your credit score may have a small impact on your interest rate. You will likely be offered an interest rate around 0.5% higher than the lowest rate available.
  • Moderate (620660): Your credit score will certainly begin to affect your interest rate. You will likely be offered an interest rate that is approximately 1%1.5% higher than the lowest rate available.
  • Poor (580620): Your credit score will have a great impact on interest rates. You will likely be offered an interest rate approximately 3%5% higher than the lowest rate available.
  • Very Poor (500580): Your credit score will severely affect your interest rate. You will likely be offered a very high rate that will depend on a variety of circumstances that are taken into consideration (other debt, debt-to-income ratio, credit utilization, etc.).

While the information above is a generalized outline of credit scores and their impact on interest rates, the decision is ultimately up to the entity you are working with to make your next big purchase.

Check your credit score to get a better idea of what interest rates you may qualify for!