ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -“Your credit score is one factor that can affect your interest rate, ” according to the CFPB. “In general, consumers with higher credit scores receive lower interest rates than consumers with lower credit scores.”

Detailed explanation-2: -A higher score increases a lender’s confidence that you will make payments on time and may help you qualify for lower mortgage interest rates and fees.

Detailed explanation-3: -A higher credit score signals that a borrower is lower risk and more likely to make on-time payments. Credit scores are often used to help determine the likelihood someone will pay what they owe on debts such as loans, mortgages, credit cards, rent and utilities.

Detailed explanation-4: -“The best published interest rates for auto loans are 720+ and for mortgages 760+, ” financial expert John Ulzheimer, formerly of FICO and Equifax, tells Select. “As such, I always tell people, shoot for 760 or better.

Detailed explanation-5: -Because lenders can be more confident someone with a higher credit score will repay the debt in full and on time, they usually charge these borrowers a lower interest rate. When a lender is sure it’ll get its money back, it doesn’t feel the need to guarantee returns with a high interest rate.