Interest rates do not affect your credit score directly. The interest rates on credit cards and other loans will determine how much you pay in finance charges. A low credit score will cause creditors to charge you higher rates of interest.

Effects

A credit score is not impacted by interest rates alone. Your interest rates can cause a chain reaction of events to unfold that will eventually cause your credit score to decline. However this may not happen to everyone. It all depends on the individual and the ability to pay debts.

Rate Increase

When your interest rates increase substantially on your mortgage, auto loan or credit cards your payments will increase as well.

Considerations

You can call your credit card companies and negotiate for lower rates of interest, which can lower your payments and make it easier for you to make your payments.

Pay History

If your payments increase too much you may not be able to make all of your payments. Missing payments will lower your credit score.

Variable Rate

When a variable interest rate increases on a mortgage the payments will increase beyond the ability of the applicant to pay monthly and the result is foreclosure. If a foreclosure is reported on your credit file, your score can drop substantially.

Significance

If your credit score decreases, you will need to take the necessary steps to increase your score. Sometimes it's a matter of paying your debts on time in the future. Another way to increase your score is paying down your debt.

Source:

myFICO: What's in your FICO score

Bankrate.com: Tips for boosting your credit score; Pat Curry

MSN Central: 7 fast fixes for your credit scores; Piz Pulliam Weston