Credit Reports are Key

Despite lenders' willingness to hand out money, a good credit record is as important as ever. Nearly all lenders have come to rely heavily on computerized profiling to determine what credit they're willing to extend to a potential borrower.  Information comes from your payment history, card balances, auto loans, retail accounts and hundreds of other factors.  The end result is a numerical score that guides lenders in the terms they offer for a variety of financial products. 

High scorers get the lowest interest rates and higher credit lines.  Those with low or failing "grades" will get very little and pay plenty.  For them the rate on a mortgage will be as much as 6% points higher than the prevailing rate most credit-worthy customers get.  A high credit score not only gives you better terms today but may be important in the future should interest rates rise and credit standards tighten.

Source: Keep your credit record clean. (1999, July). Consumer Reports, 16.