Lenders use your credit score to determine whether or not they will lend you money for car
loans, a credit card, a mortgage, etc. It also determines how much interest you’ll pay.
In 2016, more than ever before, three credit scores will be more important. In December, the
Federal Reserve Board increased the federal funds
rate for the first time in almost seven years.
The federal funds
rate affects the prime rate, which is the lowest rate that lenders will charge
their most creditworthy consumers. This means that rates will go up on things like credit cards or
mortgages.
Having a good credit score will usually get you the best offers and/or terms and conditions on
loans. Consumers have some time to get their credit in order. The fed will raise rates between
0.25 percent and 0.5 percent.
The first step is to find out how good your credit is or what factors may be bringing it down. Get
free credit reports on AnnualCreditReport.com, or every month on Credit.com. A few ways to
improve your credit score include settling defaulted accounts, paying down high credit card
balances, and limiting credit inquiries. Also, make sure to consistently pay off all bills on time.
Try to keep the amount of debt you owe below at least 30 percent and ideally 10 percent of your
available credit.