How does a credit score impact your ability to get credit?

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Many people are finding that their credit scores have taken a big hit during these tough economic times. and as layoffs continue to mount more people will find they face a problem. In today's tight market if your score is below 650, you can probably forget about getting new credit.

People with scores between 650 and 700 may be able to get credit, but they'll pay higher interest rates. To get the best rates you'll need a score over 760, but that's been true for a long time. The big difference now is that fewer people have scores above 760 as the credit reporting agencies put tighter restrictions on those scores.

Most people who pay their bills on time and who carry average credit utilization of about 25% to 35%, fall in the level of 700 to 750. You have to use less than 20% of your available credit to get the best scores. You also should not have applied for credit more than twice in the past 12 months.

Watching Your Plastic

    This handout photo received on October 31,2008 courtesy of the Madera County Sheriff's Department shows the Steve Fossett crash site in Madera, California. US investigators in California looking into the disappearance of millionaire adventurer Steve Fossett have found bones and other personal items near to where his mangled plane was discovered, a report said on October 31, 2008. Bones, a pair of sports shoes, credit cards and Steve Fossett's Illinois state driver's license were found about half a mile (800 metres) from the spot where his plane was found at the beginning of October, the Los Angeles Times reported. The skeletal remains, which are believed to be human, were sent to a state crime laboratory for DNA testing, said Madera County Sheriff John Anderson. Officials hope to receive the results by early next week, the report said. Wildlife experts and police have speculated that wild animals may have devoured the aviator's remains. AFP PHOTO/MADERA COUNTY SHERIFF'S DEPARTMENT/HANDOUT/RESTRICTED TO EDITORIAL USE=GETTY OUT= (Photo credit should read HO/AFP/Getty Images)

    AFP/Getty Images

    This handout photo received on October 31,2008 courtesy of the Madera County Sheriff's Department shows the Steve Fossett crash site in Madera, California. US investigators in California looking into the disappearance of millionaire adventurer Steve Fossett have found bones and other personal items near to where his mangled plane was discovered, a report said on October 31, 2008. Bones, a pair of sports shoes, credit cards and Steve Fossett's Illinois state driver's license were found about half a mile (800 metres) from the spot where his plane was found at the beginning of October, the Los Angeles Times reported. The skeletal remains, which are believed to be human, were sent to a state crime laboratory for DNA testing, said Madera County Sheriff John Anderson. Officials hope to receive the results by early next week, the report said. Wildlife experts and police have speculated that wild animals may have devoured the aviator's remains. AFP PHOTO/MADERA COUNTY SHERIFF'S DEPARTMENT/HANDOUT RESTRICTED TO EDITORIAL USE =GETTY OUT= (Photo credit should read HO/AFP/Getty Images)

    AFP/Getty Images

    This handout photo received on October 31,2008 courtesy of the Madera County Sheriff's Department shows the Steve Fossett crash site in Madera, California. US investigators in California looking into the disappearance of millionaire adventurer Steve Fossett have found bones and other personal items near to where his mangled plane was discovered, a report said on October 31, 2008. Bones, a pair of sports shoes, credit cards and Steve Fossett's Illinois state driver's license were found about half a mile (800 metres) from the spot where his plane was found at the beginning of October, the Los Angeles Times reported. The skeletal remains, which are believed to be human, were sent to a state crime laboratory for DNA testing, said Madera County Sheriff John Anderson. Officials hope to receive the results by early next week, the report said. Wildlife experts and police have speculated that wild animals may have devoured the aviator's remains. AFP PHOTO/MADERA COUNTY SHERIFF'S DEPARTMENT/HANDOUT/RESTRICTED TO EDITORIAL USE=GETTY OUT= (Photo credit should read HO/AFP/Getty Images)

    AFP/Getty Images

    This handout photo received on October 31,2008 courtesy of the Madera County Sheriff's Department shows the Steve Fossett crash site in Madera, California. US investigators in California looking into the disappearance of millionaire adventurer Steve Fossett have found bones and other personal items near to where his mangled plane was discovered, a report said on October 31, 2008. Bones, a pair of sports shoes, credit cards and Steve Fossett's Illinois state driver's license were found about half a mile (800 metres) from the spot where his plane was found at the beginning of October, the Los Angeles Times reported. The skeletal remains, which are believed to be human, were sent to a state crime laboratory for DNA testing, said Madera County Sheriff John Anderson. Officials hope to receive the results by early next week, the report said. Wildlife experts and police have speculated that wild animals may have devoured the aviator's remains. AFP PHOTO/MADERA COUNTY SHERIFF'S DEPARTMENT/HANDOUT/RESTRICTED TO EDITORIAL USE=GETTY OUT= (Photo credit should read HO/AFP/Getty Images)

    AFP/Getty Images

    A Zimbabwean purchases tomatoes in Harare on September 21, 2008 with the Zimbabwe dollar equivalent to 2 US dollars. With prices rapidly rising, even more than once in one day, shopping is a mathematical proficiency test for Zimbabweans. To ensure their survival in an unpredictable, environment shops and service providers quote three different prices for the same item for shoppers buying in cash in the local currency, cash in foreign currency and those using credit cards. AFP PHOTO / Desmond Kwande (Photo credit should read DESMOND KWANDE/AFP/Getty Images)

    AFP/Getty Images

    A Zimbabwean purchases bread in Harare on September 21, 2008 with the Zimbabwe dollar equivalent to 2 US dollars. With prices rapidly rising, even more than once in one day, shopping is a mathematical proficiency test for Zimbabweans. To ensure their survival in an unpredictable, environment shops and service providers quote three different prices for the same item for shoppers buying in cash in the local currency, cash in foreign currency and those using credit cards. AFP PHOTO / Desmond Kwande (Photo credit should read DESMOND KWANDE/AFP/Getty Images)

    AFP/Getty Images

    This handout photo courtesy of the Boston Police Department shows suspect Clark Rockefeller. FBI agents on August 2, 2008 arrested a man accused of abducting his seven-year-old daughter, who was visiting from London, sparking a national manhunt and fevered speculation over the flamboyant fugitive's identity.The Federal Bureau of Investigation in Boston, where Clark Rockefeller allegedly abducted his daughter Reigh Storrow Boss from his ex-wife a week ago, said the fugitive was arrested in Baltimore, Maryland, and the girl freed. Rockefeller is now likely to face charges including kidnapping, assault, and possibly identity theft. However, police are no closer to resolving who the man they have in custody really is. He has reportedly used a number of aliases, including J.P. Clark Rockefeller, Clark Mill Rockefeller, as well as plain Michael Brown. Police at first thought he was about to flee to Bermuda or Peru on a yacht docked in Long Island, near New York. Some reports had him already in the Caribbean. AFP PHOTO/BOSTON POLICE DEPARTMENT/HANDOUT=RESTRICTED TO EDITORIAL USE =GETTY OUT= (Photo credit should read HO/AFP/Getty Images)

    AFP/Getty Images

    LA CANADA, CA - AUGUST 05: Customers shop at a TJ Maxx store on August 5, 2008 in La Canada, California. The Justice Department has charged 11 people with stealing more than 40 million credit and debit card numbers of customers shopping at TJX Companies, which owns the Marshall's and TJ Maxx chains, and other major retailers by hacking into their computers. The information was then allegedly sold to people who used it to steal tens of thousands of dollars at a time from accounts through automated teller machines in the US and Europe. It is one of the biggest identity-theft cases on record. Charges against the suspects, who are from the US, China, Ukraine, Belarus, and Estonia, include computer fraud, wire fraud, access-device fraud, aggravated identity theft and conspiracy. The suspects also accused of hacking into the computers of Barnes & Noble, Forever 21, Sports Authority, OfficeMax, Boston Market, DSW Inc., and BJ's Wholesale Club to steal information. (Photo by David McNew/Getty Images)

    Getty Images

    LA CANADA, CA - AUGUST 05: Customers shop at a TJ Maxx store on August 5, 2008 in La Canada, California. The Justice Department has charged 11 people with stealing more than 40 million credit and debit card numbers of customers shopping at TJX Companies, which owns the Marshall's and TJ Maxx chains, and other major retailers by hacking into their computers. The information was then allegedly sold to people who used it to steal tens of thousands of dollars at a time from accounts through automated teller machines in the US and Europe. It is one of the biggest identity-theft cases on record. Charges against the suspects, who are from the US, China, Ukraine, Belarus, and Estonia, include computer fraud, wire fraud, access-device fraud, aggravated identity theft and conspiracy. The suspects also accused of hacking into the computers of Barnes & Noble, Forever 21, Sports Authority, OfficeMax, Boston Market, DSW Inc., and BJ's Wholesale Club to steal information. (Photo by David McNew/Getty Images)

    Getty Images

    LA CANADA, CA - AUGUST 05: Customers shop at a TJ Maxx store on August 5, 2008 in La Canada, California. The Justice Department has charged 11 people with stealing more than 40 million credit and debit card numbers of customers shopping at TJX Companies, which owns the Marshall's and TJ Maxx chains, and other major retailers by hacking into their computers. The information was then allegedly sold to people who used it to steal tens of thousands of dollars at a time from accounts through automated teller machines in the US and Europe. It is one of the biggest identity-theft cases on record. Charges against the suspects, who are from the US, China, Ukraine, Belarus, and Estonia, include computer fraud, wire fraud, access-device fraud, aggravated identity theft and conspiracy. The suspects also accused of hacking into the computers of Barnes & Noble, Forever 21, Sports Authority, OfficeMax, Boston Market, DSW Inc., and BJ's Wholesale Club to steal information. (Photo by David McNew/Getty Images)

    Getty Images



You can calculate your credit utilization by dividing your total outstanding debt on credit cards by your total available credit lines. For example, if you have $1,000 in charges and $10,000 in available credit your credit utilization ratio is 10% (1,000/10,000).

So what does it mean to your pocketbook? People with scores of 760-850 can get a 30-year fixed mortgage at 5.76% in today's market, while people with scores of 700 to 750 will pay slightly more in interest. They can get a rate of 5.98%. If your score is below 660 and you can find a lender your mortgage interest would be at least 6.8% and could go as high as 10.5% with a score between 500 and 549.

You may be wondering how this translates into cash. A $100,000 mortgage loan at 5.76% equals an interest and principal payment of $548.21. A loan just one percent higher at 6.8% equals an interest and principal payment of $651.93 or about $1,200 per year. If your loan rate is 10.5%, you'll be paying $914.74 or about $366 per month, which totals about $4,400 more per year.

If you need a car, you'll find a little more leeway. The best rate of 6.24% goes to people with scores of 720 to 850. Scores between 690 and 719 can find loans at about 7.75%, but if your score is below 660 loans jump to at least 11.265%. Some new car dealers are offering 0% loans, but you probably need the best scores to qualify for those.
Home equity lines start at 7.9% for people with scores of 740 to 850. If your score is under 700 you're looking at a rate of at least 9.5% and it could go as high as 12.2%.

Lita Epstein has written more than 25 books including the "Complete Idiot's Guide to Improving Your Credit Score" and "The 250 Questions You Should Ask to Avoid Foreclosure."
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