Your Credit Score Effects Everything
July 3rd, 2007 Categories: Financing, Keller Williams
Your credit score can have a tremendous impact on your pocketbook, your future and also your general peace of mind. If your credit score is not great, it can cost you tens of thousands and even hundreds of thousands of extra dollars in your lifetime in the form of excess interest, fees and charges. Of course if this same money was invested over a lifetime, it could make you a millionaire rather than a slave to debtors who keep charging higher and higher interest rates the lower that your credit score falls.
Notice that in order for you to lose a lot of money in terms of interest rates on loans, your credit score doesn’t have to be bad …all it has to be is “not that great.” Unfortunately, a person’s credit score can be very fragile. Sometimes all it takes is one missed payment to knock about 100 points off of your numbers and knock you from the coveted position of a person with good credit to a struggling and more expensive existence as a person with mediocre credit.
The key is to think of your credit score as being an extension of your personal reputation. If your credit score is high enough then lenders will be fiercely competing with you trying to get your business. Your mailbox will be crammed with offers from credit card issuers and mortgage lenders who will be competing fiercely to offer you loans, credit cards and mortgages with low interest rates.
However, if you have a low credit rating you are still likely to find yourself with a crammed mailbox but it will be full of offers for loans with a high interest rate and notification of sudden split decisions made by credit card companies and other lenders to raise your interest rates with no warning.
A high credit score will also get you great deals on auto financing if you need new wheels, home loans if you want to buy or renovate a house and business loans if you want to start your own enterprise. A low credit score turns you into a renter for life.
Whether or not your credit score is high or low can also affect your personal reputation. Landlords and insurance companies also look at your credit scores to find out what kind of person you are. A landlord may ask you for more of a deposit or deny you an apartment if your credit score is low. An insurance company might up your monthly rates if they detect that you are a financial risk that may not make its payments on time.
Life can be rigid and expensive if you have a bad credit score. If your credit score is low or next to non-existent you will find yourself in a consumer’s purgatory where it is impossible for you to maintain mainstream credit. If you do happen to stumble upon an opportunity to obtain credit, chances are that it will be offered by one the many legal loan sharks in North America who will charge you high rates and fat fees (usually more than 40%) to borrow even the slightest amount of money.
In essence, your low credit score can cost you. You can even have a really great credit score and not realize that you qualify for better terms. Sometimes the problem isn’t getting loans; it is getting loans that cause you to pay a high price over the long term.
I always advise my customers to protect their credit in order to let the mortgage lenders do their jobs. I’m not in the mortgage business but I know enough to know your credit is a huge percentage of the equation!
So like I tell my clients do the RIGHT MATH 
!!
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