Credit Matters

I don’t need a credit repair progam, I’ve never filed for bankruptcy, I’ve only been late on a payment or two and that was a couple years ago.

If you’re like just about everybody else you probably feel the same way, my brother had no thoughts at all of credit repair. Then we got a copy of his credit report which also showed his credit score. It wasn’t that his credit score was all that bad it just wasn’t as good as it could have been.

What if I told you that by just doing a few simple things that you could raise your credit score 100 or more points? I know you’re thinking why, what’s the point?

You probably already know that your credit score has an impact on getting a home mortgage or car loan but what you probably don’t know is that it also has an impact on:

• how much you pay for insurance
• whether or you’re hired for that job you want
• the deposit you’re required for your cell phone
• and of course the interest rates you pay on all your credit

What my brother needed was a credit tune up not credit repair. With a few simple tricks we were able to increse his credit score from a fair credit rating to an excellent credit rating in just over 3 months.

Let’s take a look at how a change like this can impact your day to day life.

In this first example we are going to buy a home, (this is what my brother was doing), this house is going to cost us $100,000 and we’re going to apply for a fixed 30 year mortgage.

With an average credit score we can get a mortgage at 8.5% and with an excellent credit score we’ll get a rate of 6.5%. So what does that mean in dollars and cents?

• at 8.5% your payment will be $768.91 and you will pay a total of $176,808 in interest over 30 years
• at 6.5% your payment will be $632.07 and you will pay a total of $127,544 in interest over 30 years

A little simple math tells us that we’ll save $136.84 every month and after 30 years….we’ll save $49,264, thats almost half of the original $100,000 we borrowed.

What about our credit card rates? With your excellent credit score you can get a credit card with a rate of 8% or so, (we’ll talk about 0% balance transfer credit cards in another article), with average credit, your rate will be around 16%.

In this example we’ll say we carry a balance of $5000, I know some of you carry a higher balance while others a lower but $5000 is a pretty good average. So, lets take a look at the numbers:

• at 8% your fixed payment will be $125 and you will pay a total of $2192.71 in interest over 58 months.
• at 16% your fixed payment will be $125 and you will pay a total of $834.91 in interest over 47 months.

Again you see you’re paying $1357.80 more in interest for borrowing the same amount of money.

Like to know the difference between a credit card rate of 8% and a rate of 16%, (besides the obvious of 8%), less than 90 days worth of work tuning up your credit score.

There are many other examples I could list but I think the point is clear, all of us could spend a little time tuning up our credit score and save a lot of money.

If you still have questions go to: “7 Credit Secrets” it’s a free report on how to improve your credit score.