Bad Credit Will Cost You Dearly

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Need for Credit Counseling Services
Do you feel the need for credit counseling services? Are you finding it hard to figure out how to manage your money so your debts are repaid? Are you having trouble making even the minimum payments on credit bills? Then it's time to call in the experts.

It is easy to get overwhelmed by repayments when you are juggling many debts. Thousands of people just like you experience difficulty i... Read credit counseling article



Build Credit With Good Money Management Skills
You should consider how to build credit using good money management skills today. Your first step is to keep a record of outgoings and use a strict budget that you can stick to. Bankruptcy and debt consolidation may add more costs to an already bad situation. You will have to deal with more expenses, high interest and repayments that may not be enough to satisfy your creditors. This can be stressf... Read credit counseling article



Bad Credit Will Cost You Dearly
Having a bad credit score will cost you a lot more than a higher interest rate for a few loans. It extends into many parts of your financial life.

So many people fail to understand how important their credit is until they try to buy a home or take out a loan. People with bad credit usually know that they will have to pay higher interest rates. But they often don't realize how deeply they will really be affected.

Let me give you an example. If you have a credit score of 720, you can pretty much expect to get the best rate available. For our example, that is 6%. If you have a credit score that is good, but just not perfect -- say 700 -- you could expect to find an interest rate of 6.15%. Not a huge difference. But if you have a credit score of 555, which is considered very poor, you can expect to pay approximately 9.6%. This could result in as much as $500 a month more on a mortgage. That's a lot of money.

In addition to having to pay a higher interest rate, many borrowers with bad credit scores end up paying higher mortgage loan origination fees.

To qualify for the much advertised zero percent of low APR financings offered by many car manufacturers, you must have near perfect credit. If you have poor credit, you will probably have to deal with a sub-prime lender (also known as the no loan is turned down lender). You could pay an interest rate of 25%!

If you already have a bad credit score, a credit card probably isn't a good idea. But it is one of the ways to rebuild your credit. Be prepared to see interest as high 30%, if you can find a credit card at all. You will probably have to pay annual fees as well. Some people are even asked to pay a set-up fee to even get the card. It is often easier to go with a secured card than try to find an unsecured one.

Most people are unaware of the fact that insurance companies use their credit scores to determine risk. The assumption is that people with lower credit scores are at a higher risk for claims than are those with good credit. A person with good credit could pay as much as 10% less than someone with bad credit. This is seen in life insurance, homeowner's insurance, auto insurance and other forms of insurance. Your bad credit can cost you hundreds of dollars a year in insurance premiums.

But that isn't all. You could have to pay a higher deposit to lease or rent an apartment. You could even be turned down for a job. Low credit scores will cost you thousands of extra dollars a year. Take the steps to increase your score. While it isn't easy and it takes time, it is well worth it.

Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!

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How to Raise Your Credit Score

You won't be able to calculate the effects that a low credit score can cause but you will be able to recognize the damage that it can do your life and to your finances. The good thing about your credit score is that even a small increase in your score can save you thousands of dollars of interest in your home mortgage, car loan, or the rates on your credit cards.

Your credit score is a dynamic number and it will change every time your credit report changes. Even though you may think that this change is insignificant it can have a big impact on your credit rating. If you want to improve your credit score here are some things that you should focus on as per the financial experts:

Carefully review your credit report and then take the time to correct any errors. This includes getting rid of information that is bad and inaccurate. This step alone can make a big impact on your credit score.

Don't take old financial advice that tells you to close any credit card accounts you have that are unused or old. Doing this will reduce the amount of potential available credit that you have but will also change your debt ratio by raising it. You don't want to raise your debt ratio since this will lower your credit score. Creditors will look at the average amount of time that you've had your accounts so this is another reason to keep your old accounts around. Start paying off your credit cards. Try to reduce the balance on your cards by at least 75% or lower of your total amount of credit. If you can't do 75% work towards at least 25%. Pay your bills when they are due! This is perhaps the most important thing that you can do to raise your credit score. Try to limit the number of inquires that are made on your credit report. This means applying for as few new credit cards as possible. The less inquiries, the higher your credit score. Don't apply for new credit cards just so that you can increase the amount of credit that you have available to you.

From more ideas on credit, credit scores, and identity theft, visit the ID Theft Protection and Prevention web site at http://www.idtheftbasics.com/ . You will find a ton of great information and tips that can save you time, money, and frustration.

Bret Grinslade was hit with Identity Theft in 2004 and has committed himself to helping others understand their credit and id theft. Visit http://www.idtheftbasics.com to immediately learn ways to protect yourself. Bret is currently giving away a free 55 page Guide To ID Theft Protection and Prevention which will help you sleep safer tonight!




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Bad Credit Will Cost You Dearly
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