Lines of Credit and Credit Score Improvement

A line of credit is a type of loan that allows an individual or business to borrow money up to a certain limit. A line of credit is typically used for short-term financing needs, such as making purchases, paying bills, or covering emergency expenses.

What Determines Rates in a Line of Credit?

The interest rate on a line of credit is typically determined by a combination of factors, including the borrower’s credit score, the size of the loan, the loan term and the type of collateral used to secure the loan. Other factors that may influence the rate include the lender’s risk assessment, regional economic conditions and competitive rates offered by other financial institutions.