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Everywhere you look, interest rates are low, low, low. Indeed, interest rates are so low that it is tempting to do any number of things that involve borrowing money. With car loan rates rather low, it is tempting to buy a new car — or even refinance your current auto loan. You might also find that the dropping mortgage rates provide an incentive to refinance the house (if you don’t plan to buy a new one).

With interest rates so low, it’s a good time to lock in a favorable rate. However, getting the best rates is tough.

How is Your Credit Score?

It used to be that you could get a good interest rate with a credit score of just a little less than 700. Seven years ago, I got what was then the best rate on a car loan with a credit score of 680. Three years ago, a credit score of 710 qualified me for the best rate on a home mortgage loan. Now, even though my credit score has continued to improve, it’s not certain I would qualify for the best available rates.

In all likelihood, my credit score would qualify me for a great rate on a car loan, and maybe even a good mortgage rate. But it’s important to realize that you might not even be considered for the best available rates unless your credit score is around 720 (you could probably have a lower score and still qualify for the best car loan rate, though).

What’s Your Income?

Another issue that causes problems in my case (were I looking for a loan) is my income situation. 85% of my family’s income comes from my work as a freelancer. In order to qualify for the best rates, I have to be able to show years of tax returns. Even then, many banks are ambivalent right now about taking on the risk of someone who is self-employed.

It can get even trickier if you are moving because of a new job that you haven’t started yet — especially if you are looking for a home loan and haven’t managed to sell your old house yet. Documentation of income is more important now than it was three years ago, so make sure you have what you need, particularly if you are applying for a mortgage.

Second Best is Probably Good Enough

Even if you don’t have what you need to qualify for the best mortgage rates, you can still come out ahead. Rates are so low that even the second best rate is probably still a bargain, compared to what you might otherwise be paying.