Interest Rates are Going Up… Now What?

If you’ve been paying attention to current economic news, you’re probably aware that interest rates are beginning to creep up.  What you may not know is how your credit scores, combined with higher interest rates, could profoundly affect your household budget.

Over the next 6-8 months (or sooner) here’s what we are likely to see – some of which is happening already:

1. Higher rates on home loans (these rates are already higher than they were a month ago)
2. Higher rates on car loans (not to mention higher prices on cars as well)
3. Increases to the Prime Lending Rate (this immediately makes your credit card rates and home equity loans increase)

Ok, so that’s all bad news for consumers, but it doesn’t end there…

When you have anything less than top tier credit scores (anything less than about 760) lenders will charge you more.  Thankfully, for the past 10 years or so, rates have been so low that if you had to pay a little more because of your credit scores, it didn’t “hurt” too much.  For instance, maybe you paid 4.5% for a home loan instead of 3.5%.  Now, however, those little increases that get charged to borrowers with lower scores are going to be a bit more painful and have more of an impact on finances.

So what can you do?

Well, you can not control interest rates but you CAN control your credit scores.  The expected FED rate hikes have not hit us yet, but are expected to come soon.  This gives you a few months to fix up your credit by getting negative items removed from your credit report.  Every month we have dozens of people graduate from our program with higher credit scores and we can help you do the same.

If you or a family member is dealing with less than perfect credit scores, let’s talk!  We’ll explain the process and review your options.  Just call our office and schedule a free consultation.