Credit Scores and Interest Rates

Credit scores and interest rates enjoy an inverse relationship. As a person’s credit score is higher, the interest rate likely to be charged on a loan gets lower. Unfortunately, as a person’s credit score gets lower, the interest rate charged on a loan gets higher.

While this system is meant to ensure that the bank loses as little money as possible, it is frequently harmful to individuals who have gotten into trouble in the past but are now on the correct path moving forward. Individuals recovering from bankruptcy, regardless of the cause of their bankruptcy, are frequently given unfavorable interest rates, irrespective of how secure their recent credit history has been.

The problem is that a credit history will display everything from the past seven years. This means that a person, even if their credit has been perfect or flawless for the past five years, is still going to be punished by banks for a bankruptcy that occurred six and a half years ago. The banks think they are protecting themselves but they are protecting themselves from something that happened at an isolated bad point in a person’s life.

Bankruptcy is frequently caused by medical bills and illness. This means that a person can be punished by interest rates for something that was really out of his or her control.

A person needs to guard his or her credit score jealously to protect him or herself from obscene interest rates.

Contact a Boston Bankruptcy Lawyer

If you have been financially hurt by medical bills and see no way out of the pile of debt, contact the Boston bankruptcy lawyers of Joshua Spirn & Associates at 1-800-975-5346.