Good Credit Scores obviously is to pathway to saving money.
You are probably asking why, well the answer is on money
borrowed. The average American has to borrow money
occasionally for different reason. Let's assume you need to
buy a car, and you think your credit score is low. You are
considered a high risk and the banks will charge you higher
interest on the money borrowed. Maybe you need to get an
installment loan from the bank for personal reasons, you
may get denied because your credit score is too low. What
every your situation is your credit score will determine
how much money you have in the bank at retirement. If you
think about this it is pretty scary.
Examples of Money lost to High Interest:
Car loan with low credit score:
Loan Amount: $25,000
Interest rate: 12%
Term: 6 years
Payment: $488 per month
Car loan with high credit score:
Loan Amount: $25,000
Interest rate: 6%
Term: 6 years
Payment: $414 per month
*This calculation is a true current market rate calculation
for car loans currently.
The difference in payment is $74.00 per month. If you have
good credit you would have saved $5,328 dollars. This money
could be in a interest bearing account making you some
interest as opposed to going to the bank due to your high
credit risk. I don't think most people see how bad credit
can affect your long term goals. Maybe you have kids and
you are trying to save for college, this is quite bit of
money you could have saved for one of your kid's tuition.
This principle applies to credit cards as well. The worse
your credit the worse your terms will be and the more money
you throw out the window. Once you see this on paper it is
quite scary, but there is help. The road to recovery
typically takes about a year, and the first step is to get
a free credit check with credit scores. Go ahead and make
the plunge and see where your credit report currently
stands. I think most people avoid knowing what is on their
credit report. No one likes to hear or see bad news.
Unfortunately this does not get the problem at hand
resolved.
Life is too short and we need to live well so we can enjoy
our short stay on this wonderful planet. You might as well
make the best of it, and start saving on interest and terms
today by being an educated consumer of your personal
finances. If you have been avoiding it for a while, go
ahead and make that change starting right now. There is
nothing like the feeling of going to the bank and not
worrying about whether you will get approved or not. With
good credit all you have to worry about is what bank will
give you the best terms. Remember your "Credit is your
Life."
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About the Author: Mike Clover is the owner of
http://www.creditscorequick.com/ . CreditScoreQuick.com is
the one of the most unique on-line resources for free
credit score report, fico score, Internet identity theft
software, secure credit cards, and a BlOG with a wealth of
personal credit information. The information within this
website is written by professionals that know about credit,
and what determines ones credit worthiness.
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