HOW YOUR CREDIT RATING
AFFECTS YOUR INTEREST RATE
YOUR INTEREST RATE IS A DIRECT
RESULT OF YOUR CREDIT SCORE
THE HIGHER YOUR SCORE
THE LOWER THE INTEREST RATE
THE LOWER YOUR SCORE
THE HIGHER THE INTEREST RATE
YOUR CREDIT SCORE IS A
RISK FACTOR ON YOU!
A PROBABILITY OF PAYMENT
TODAY BANKS AND VEHICLE
MANUFACTURER FINANCE ARMS
USE A “TIERED” SYSTEM FOR
ASSIGNING INTEREST RATES
EXAMPLE ONLY:
|
Scores |
TIER 1 |
TIER 2 |
TIER 3 |
TIER 4 |
720+up |
4.99 |
5.25 |
5.75 |
6.25 |
680-719 |
5.50 |
5.75 |
6.25 |
6.75 |
650-679 |
6.00 |
6.25 |
6.75 |
7.50 |
625-649 |
7.00 |
7.50 |
8.00 |
9.00 |
600-624 |
9.00 |
10.00 |
12.00 |
14.00 |
599+less |
11.00 |
13.00 |
15.00 |
17.00 |
SCORES ARE LISTED ON THE LEFT
TIERS ARE LISTED ON TOP
TIERS ARE DETERMINED BY A
COMPUTER USING A SCORING
SYSTEM OF CUMLATIVE POINTS
FOR THE FOLLOWING CATEGORIES
- NUMBER OF JOBS OF APPLICANT
- TIME ON EACH JOB
- NUMBER OF RESIDENCES
- TIME AT EACH RESIDENCE
- INCOME LEVEL
- DEBT TO INCOME RATIO
- BANKRUPTCY, FORECLOSURE, CHARGE-OFFS
- AMOUNT OF MONEY ALREADY OUTSTANDING
THE TIERS ARE DESIGNED TO
GIVE THE LENDERS INSIGHT
INTO THE INDIVIDUAL CONSUMER
FROM A COMPUTER SCORING
POINT OF VIEW.
A CONSUMER WHO IS ALWAYS
CHANGING JOBS AND MOVING
FROM PLACE TO PLACE MAYBE
A HIGHER RISK THAN SOMEONE
WHO IS ON THE JOB A LONG TIME
AND AT THEIR RESIDENCE
MANY YEARS.
