Excerpts from an article run for WSJ.com
Good news for those with less-than-stellar credit scores below 660: Banks are finally opening the lending spigots to you, too. But banks don’t seem to be returning to the heyday unbridled lending to consumers who couldn’t afford the debt they were taking on. It’s not as easy get. Lenders are making smarter decisions with more strict criteria in opening credit to these consumers than in the past.
It will cost you more, too. Good credit always begets good interest rates. Bad or mediocre credit scores will up your interest rates as much as 5 to 10 percentage points, according to some researchers. It seems they are pricing those accounts much higher out of the gate. That’s also tied to the 3-year-old credit card legislation that prohibits card issuers from raising rates for the first year in which the account was open and then doing it only on new purchases.