There’s an old saying about borrowing: “Anybody can get a loan, but it’s tough to get a low-interest rate.” Despite the exaggeration, the adage is mostly true. Even if your repayment history is not so hot, you’ve had a few write-offs from disgruntled creditors and been subject to a bit of collection activity, you can still borrow money in today’s economy. The bottom line is less glowing: if your scores are bad, you’ll end up with a higher-than-normal interest rate. Here’s how to find the most favorable rate available to people with scores, on-time histories, and incomes like yours:

Root Out Reporting Errors

Check with the bureaus at least twice per year and study the reports. Errors are actually rather common, so keep a sharp eye out for creditors you’ve never heard of, amounts that don’t match up with your own records and anything else that appears to be off-kilter. One or two errors could lead to a bad score. Though it affects interest, bad credit doesn’t mean you won’t be approved. What does it mean? While some institutions will work with you, the rate you end up with might be quite high. So, go over your reports carefully.

Get Several Quotes

Always shop around for rates and other borrowing terms. When you obtain multiple quotes, you’ll have a better picture of what’s available and have the power of information on your side. It’s common to get offers that include differing rates, repayment lengths, late fees, and other contract details. Look at the big picture, not just at the monthly payment amount, time to repay, or the cost of the money. The only way to make this strategy work is to use online resources, the telephone, and anything else you can think of to get several quotes. After that, take your time to compare them and select the one that works best for you.

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Put More Money Down

It’s simple mathematics: the more money you put down, the better off you’ll be. That’s because down payments are the most direct way of chopping into the principal. You instantly improve your financial situation when you make a large down payment. That’s why financial counselors always say, “Do whatever you can to make the biggest down payment possible.” Lenders often adjust rates downward based solely on a substantial down payment. This technique works whether you’re buying a car, a home, an RV, or just taking out a personal loan. It’s sort of a universal principle for reducing principal.

Keep Utilization Under 20 Percent

Borrowers who keep their credit balances at 20 percent or less than the maximum are able to get much better terms on loans, all other factors being equal. That’s because a large part of the bureaus’ rating system is based on how much of your card’s maximum you use. If your total available spending power on a particular account is $2,500, try to keep your monthly balance at or below $500. If you do, it won’t be hard to find lenient terms the next time you shop for a loan.

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