Home Mortgage Rate Comparison: How Your Credit Score Affects Your APR
This probably comes as little surprise to most folks, but America pretty much runs on credit. According to newly released data from the Federal Reserve, aggregate credit card debt in the U.S. now totals $1.027 trillion, an all-time record. Aggregate credit card debt also joins student loan debt and auto loans over the $1 trillion mark. Given that the U.S. economy is 70% consumption-driven, this isn't all that shocking.
This credit card usage is what's helping to build our credit profiles, which lenders use to determine if we're worth lending to or if we should be shown the door. Perhaps the best-known credit-scoring system comes from Fair Isaac Corp., which you probably are familiar with as FICO. Your FICO credit score ranges from a low of 300 to a high of 850. The higher you credit score is, the more favorable your interest rates and options will be when looking to get a mortgage or open a credit account. A higher credit score can also help lower your home and auto insurance rates, minimize or eliminate utility deposits, and help you land your dream job, apartment, or home.
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Source: Fool.com
