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    Advanced Concepts

    Risk-Based Pricing

    The practice of offering different interest rates and terms based on individual borrower risk.

    What It Means

    Lenders use credit scores, debt-to-income, and other factors to set personalized pricing. The Fair Credit Reporting Act requires lenders to provide a risk-based pricing notice when offering less favorable terms than the best available. Comparing offers from multiple lenders helps borrowers find the best price for their tier.

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