Higher Interest Rates Hit Marginal Credit Scores Harder

You can’t turn on the news, read a newspaper, or surf the internet without seeing headlines about inflation and interest rates heading higher.  It has a lot of people worried about their ability to manage their household finances.

And if you’ve known me or have read anything I’ve written in the past 2-3 years, you’ve heard me preach about the correlation between the interest rates you pay and your credit scores.

But I’m going to say it again, just in case you haven’t heard me say it before…

Consumer interest rates such as mortgage loans, car loans, and credit cards are ALL based on the credit scores of the borrower.  Borrowers with low to average credit scores pay higher rates and thus, have higher payments on all of these common expenses.  Even if you rent your home, having low or average credit scores could result in having to pay higher security deposits or give you fewer options when it comes to rentals.

You can’t really do too much about inflation, nor can you affect the interest rates that banks and lenders charge.  Truly, your best line of defense against higher payments is to do whatever you can to keep your credit scores in the top tier, which for many lenders is 760 or above.

It starts by having a good mix of credit and using it wisely.  Then, it’s a matter of getting negative credit items removed from your credit report.  The combination of these two things allow consumers to get the lowest rates possible when they need to borrow money or make purchases with credit.

It’s pretty clear that rates and inflation will likely get worse before it gets better, so the faster you take action, the more you can lessen the financial blow from adverse economic conditions.

So take a look back at the last 5-7 years.  Have you had ANY credit issues such as late payments, collections, charge-offs, liens, judgements, bankruptcies, or foreclosure?  If so, then it’s worth your time to schedule a free consultation with one of our credit specialists and discover how we can help.

You’ve got nothing to lose except higher payments!  Let’s talk!