Higher credit scores needed for best rates

<p>With the crisis in the nation's financial industry, lenders are becoming more stingy with extending credit to applicants. A higher credit score is now needed to qualify for the best interest rates. According to this&nbsp;<a href="http://www.nytimes.com/2008/10/11/business/yourmoney/11money.html?em&qu…; target="_blank" title="New York Times article">New York Times article</a>, here’s what experts say the change means to you:</p>

<p><strong>Credit cards</strong> – You’ll need a&nbsp;<a href="http://www.myfico.com/Downloads/Files/myFICO_UYFS_Booklet.pdf&quot; target="_blank" title="FICO score">FICO score</a>&nbsp;of 720-750 to get the best rate or the reward offerings. That’s about 20-50 points higher than before.</p>

<p><a href="/cars-0" target="_blank" title="Auto loans"><strong>Auto loans</strong></a> – Not so easy to get now. You’ll need at least 786 to get the best rate – up from 741 a year ago.</p>

<p><strong>Mortgage</strong> – The bigger your downpayment, the better, as long as you have a credit score of at least 720-740, say sources. According syndicated&nbsp;<a href="http://seattletimes.nwsource.com/html/realestate/2008280221_harney19.ht…; target="_blank" title="real estate columnist Kenneth R. Harney">real estate columnist Kenneth R. Harney</a>, loan terms and credit underwriting standards have been toughened up, but you can still put down 3 percent (3.5 percent after Jan. 1) on an&nbsp;<a href="http://www.hud.gov/offices/hsg/sfh/insured.cfm&quot; target="_blank" title="FHA-insured mortgage">FHA-insured mortgage</a>&nbsp;and 5 percent on certain Fannie Mae and Freddie Mac loan programs with&nbsp;<a href="http://en.wikipedia.org/wiki/Private_Mortgage_Insurance&quot; target="_blank" title="private mortgage insurance">private mortgage insurance</a>.</p>

<p>The median FICO score is roughly 720. You can purchase your credit score from one of the three major bureaus&nbsp; -- Equifax, Experian and TransUnion -- when you request your&nbsp;<a href="https://www.annualcreditreport.com/&quot; target="_blank" title="free annual credit report">free annual credit report</a>&nbsp;to review your credit files. It's usually cheaper&nbsp;to buy a score from&nbsp;the official free credit report site, <a href="http://www.annualcreditreport.com/&quot; title="www.annualcreditreport.com">www.annualcreditreport.com</a&gt; than to buy directly from a bureau, but you might receive a newer type of credit score known as a&nbsp;<a href="http://www.vantagescore.com/&quot; title="VantageScore">VantageScore</a>&nbsp;instead of a FICO. I find that a bit annoying, since most lenders still&nbsp;look at the FICO. (If you order&nbsp;your score&nbsp;from this site, let me know what you get.)</p>

<p>Alternatively, you can&nbsp;<a href="http://www.myfico.com/Products/Products2.aspx&quot; target="_blank" title="buy all three FICO scores">buy all three FICO scores</a>&nbsp;from <a href="http://www.myfico.com/">www.myfico.com</a&gt; for $47.85.</p>

<p>If you are applying for a home loan, your lender is required to give you your credit score for free.</p>

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