An APR, or an Annual Percentage Rate, is the yearly percentage rate of interest that comes attached to your loan. This means that whenever you have a loan, every year you will have to pay back more than the loan itself in the amount of your APR, or yearly interest rate.
At some point in your life it is possible you will need to borrow money from a bank, credit union, or another type of top lending institution. So, getting the best APR is not a one-time instant scenario. Actually, by borrowing money at a good rate and making payments on time, it can be an overall lifetime credit building and maintenance strategy. Unexpected situations happen to homeowners and consumers with FICO scores ranging from 300-850.
Using some top tips and strategies to get the best APRs when you need to borrow money can help you prepare for the moment you finally submit an official application. Below, read some helpful strategies and tips on how to get a great, low APR for your loan.
Strategy #1: Pay your bills in full and on time. This includes all revolving credit card debt and installment loans in your name. For the sake of personal integrity and development of financial discipline it is also important to pay regular household bills on time such as your heat, electric, water and phone bills.
Most utility and phone companies only report your accounts to the major credit bureaus when you default on the bill. Tools such as Experian Boost now exist to change that in your favor, however. Experian Boost includes specific utility accounts in your credit report to help boost your FICO score directly with Experian.
Strategy #2: Remain employed with no breaks. Keep your job with one employer as long as possible as well. Avoid changing homes more than necessary. The longer you stay at one job and in one home the better your credit history looks to lenders.
Strategy #3: Stay vigilant about updating your credit history. Companies make mistakes and those mistakes might damage your FICO score (and approval status). Obtain a free annual credit report each year and have all erroneous reporting removed from your file.
Strategy #4: Pay your normal monthly household and grocery bills with your credit cards. Pay those credit card balances in full before the due date every month. Do you have an installment loan? Make your payments on time and above the minimum every month to boost your FICO score fast.
Now you know how to find a good rate. The next step is to actually find it! Next, learn about how to compare personal loan rates so you can apply for the right loan for you.