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Credit history and score now more important to getting loan

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You'll need a credit score of at least 720, as opposed to the 650 to 680 you could get away with a few years ago. And as with first mortgages, you'll have to document income and assets. Interest rates depend on the amount you borrow and your location. Recent rates averaged about 5.3 percent on home-equity lines of credit and 7.4 percent on loans, according to HSH.

Car loans: Better rates

When you need to borrow money to buy a new set of wheels, credit isn't the major stumbling block anymore. Loan approvals are up from last year in every credit category, according to CNW Research. "Most people have good enough credit to qualify," says Greg McBride of Bankrate.com. "The down payment is what's problematic for people without a lot of savings." Lenders are looking for 10 percent down on a new car and 20 percent for used cars.

The average rate from the manufacturers' finance companies was 4.5 percent in August, vs. 6.9 percent in January 2009. Automakers and their finance companies, desperate to prop up sales, are aggressively promoting low-rate loans on new cars for top-tier borrowers. Expect to see 0 percent offers on 2010 models as dealers clear their lots for the 2011s. And even though the new model year is still fresh, rates as low as 1.9 percent and 2.9 percent for 60 months recently made up a sizable number of offers.

Credit cards: High scores

Despite fewer credit-card delinquencies, most large issuers have not relaxed their standards; they continue to require higher credit scores and offer lower credit limits than before the recession. If you have fair or poor credit, you'll have a tough time qualifying. Even if you have a credit score of 740 or 750, you would be approved for a credit card but might not qualify for the lowest rate, says Bill Hardekopf of LowCards.com.

If you have excellent credit, whether or not you qualify for the lowest rate, your mailbox has probably been peppered with credit-card solicitations. Mintel, a market-research firm, expects issuers to send out 3 billion to 4 billion offers this year, compared with 2 billion a year ago, most of which will be for rewards cards. A lot of rewards cards have attractive perks, but now you're more likely to be charged an annual fee.

To qualify for the best offers, pay on time, even if it's just the minimum. You could receive a reminder - and a spike in your interest rate - if your payment arrives even one day after the due date.

- Kiplinger's Personal Finance


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