How Much Will Your Credit Score Matter in 2016?

How Much Will Your Credit Score Matter in 2016?Your credit score is about to become an even more important number in your life.

If you became an adult after 2008, you’re probably used to seeing interest rates in the single digits, and have maybe come to the conclusion that having a savings account is about as useful as sticking all of your cash inside of your mattress. This is because after 7 years of fostering a low-interest environment the economy has finally gotten back on its feet and the Federal Reserve has increased its rates to 0.25 percent. Here’s what your credit score and interest rates have to do with each other.

Student loans: Many student loans won’t be impacted by the new rising interest rates. But that doesn’t mean that all of them will. If you took out student loans before 2006, you’re very likely to see a rate increase. To avoid a further increase in your loans, you’re going to have to refinance your loans into a fixed-rate loan to avoid further spikes.

Credit cards: Your credit card company may have tricked you into getting a credit card because they were offering low-interest rates. Something you should definitely know is that credit card interest rates are variable—not fixed. An increase in rates could mean the following: an increase in your monthly minimum payment, and increasing the amount of time it will take you to pay off your debt.

Auto insurance: Car interest rates are usually behind when it comes to an increase in the Federal Reserve. But rest assured that auto loans will feel this effect. If you got your car before this time, don’t worry, your rates will stay as they are now.

Want more information about the interest rate hike and its effect on you? Contact Avis Lending in Irvine, California and Lahaina, Hawaii for all of your home loan needs!

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