How to Find Interest Rates Based on Your Credit Score

Your credit score describes your credit risk, and lenders ranging from car loan lenders to credit card companies check your credit score before offering you a line of credit or a loan. A higher credit score means you're a lower risk, and you can receive a higher credit limit and lower interest rates. The three main credit bureaus---Equifax, TransUnion and Experian---use slightly different criteria, and most lenders do not offer a precise credit score to interest rate conversion. However, there are general ranges that can help you figure out what lenders are likely to offer for an interest rate.

Instructions

1

Order a credit report, which includes your credit score. You're allowed one free credit report a year from all three credit bureaus, and it makes sense to get them all at once from a website such as AnnualCreditReport (see Reference). Fill in your Social Security number and other identifying information and you'll get a report online within minutes. If you've already ordered the annual free report, you can use your earlier credit score, although if you think it's changed it's probably worth the $20 to $25 to learn your new information.

2

Match your credit score against any information on your desired lender's website. Here are some general examples. For a typical 30-year fixed mortgage, a credit score of 720-850 (low risk) means you'll pay around 6 percent interest, while a credit score of 620-674 means around 8 percent, according to MSN Money. Over 30 years that can be a difference of $50,000 to $200,000, depending on the original size of the loan. Below 620, you probably will not qualify for a mortgage.

For credit cards, if your credit score is above 750, your interest rates could be as low as 8 to 11 percent, but if it's lower than 650 it could be as high as 22 percent, according to MSN Money.

3

Focus on improving your credit score by paying bills on time, keeping low balances on credit cards and not applying for more than one or two credit cards per year, especially if your credit score could mean the request will be denied. Monitoring your credit score at least once a year will help you stay on track and decide how to best manage your money.