First Person: 6 Tricks for Lowering Your Interest Rates

Whether for my business loans, mortgages, car loans or personal credit cards, there are tricks I've learned over the years to reduce my interest rates and save money. These are not your typical recommendations, from applying for a credit line increase to consolidating credit cards debts. Rather, these are ways you can cash in on a passing moment during which your credit score soars. At times you will be the one bringing about the change, at others it will result from the credit reporting system itself. I hope your find these tricks to lowering interest rates as useful as I did.

Leverage Family Members

To lower my interest rates, I transferred some of my debts to my husband's credit cards for a short while. This sudden reduction in debt at my end caused my credit score to go up. I was then able to apply for a new credit card and get a low introductory rate and a good standard (fixed) APR once the offer expired. When I got the card, I balance transferred my debt back from my spouse to my new card.

Apply Between Loans

Right after you buy a new car or a new house, there's likely to be a reporting lag on your credit report. I've had an instance when my old house was reported as paid off and my new one wasn't on the credit report yet. As a result my credit score soared. I then applied for a credit card and received a high credit line and excellent APR with which I consolidated my other credit card debts.

Apply for a Loan After an Income Increase

After I got a large raise at work, I decided to trade-in my car for a better mileage vehicle. The higher income I reported on the application was, in turn, reported to the credit bureau. As a result my debt-to-income ratio improved and my credit score improved with it. Though my credit cards didn't lower my interest on prior balances as a result, I did receive attractive promotional rates on balance transfers or direct deposit into my account.

Refuse Credit Cards From Your Spouse

When a credit card is issued to you, the credit card company will offer you a second one for your spouse. As a result the account will be reported on both your credit reports, increasing both your debt-to-income ratio in the event of a high balance. Therefore, keep your credit cards separate to keep your credit scores higher and open the door to lower interest rates.

Apply Separately not Jointly

If you are married, apply for loans separately, especially for big ticket items like cars. I've been in situations where I had to reiterate several times that I will not be signing any documents because the car loan will be in my husband's name alone. This is perfectly legal, and it means that only one spouse's credit will be hit with an inquiry. It also means that the loan will increase the debt-to-income ratio for one spouse only. By having the car loan in my husband's name , I protected my credit score and kept the door open for me to receive low interest offers from my credit cards.

Check for Duplications on Your Credit Reports

Experience has taught me to check my free annual credit report for all three bureaus (Experian, Equifax and Trans Union). Duplicate reporting is not uncommon, which means that the same credit card balance is added twice to your debt total. I've had a car payment show on my credit even though that account was paid off and closed. If you make a lot of updates to your credit report, your score will go up, which will open the door to lower interest.

More from this contributor:
Leveraging Credit Card Balance Transfer Offers
7 Credit Card Traps to Watch Out for
Smart Moves for a Lower Car Payment