Editor
14th June 2005, 14:45
Off topic, but important information to share...
Credit Scores...Why is it important? I had a friend who went for a new car loan a couple weeks ago. He pays his bills on time, never had any credit issues before. Well, the first thing they do when you want a loan is to check your credit score. He was shocked when the loan officer told him he qualified for the loan but the interest rate would be sky high.
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After asking why, he was told his credit score was on the low side. So instead of getting that 0% financing he was hoping for, he was looking at a 13% interest rate. I will let you do the math but 13% on a $40K car is, well, a lot of interest.
Credit scores are easily the most important factor when looking to borrow money. It is important that before you try to borrow money, you get a copy of your credit report and credit score. This way, there will be no surprises or embaressment when you are at the bank or car dealership.
Come to find out that someone had opened up a few accounts in my friends name and never paid what was owed. Identity theft is all the rage.
How Your Credit Score Affects You
If your credit score is high enough, you'll qualify for a lender's best rates and terms. Your mailbox will be stuffed with low-rate offers from credit card issuers, and mortgage lenders will fight for your business. You'll get great deals on auto financing if you need a car, home loans if you want to buy or improve a house, and small business loans if you decide to start a new venture.
If your score is low or nonexistent, however, you'll enter a no-man's-land where mainstream credit is all but impossible to come by. If you find someone to lend you money, you'll pay high rates and fat fees for the privilege. A bad or even mediocre credit score easily can cost you tens of thousands and even hundreds of thousands of dollars in your lifetime.
You don't even have to have tons of credit problems to pay a price. Sometimes all it takes is a single missed payment to knock more than 100 points off your credit score and put you in a lender's high-risk category.
That would be scary enough if we were just talking about loans. But landlords and insurance companies also use credit scores to evaluate applicants. A good score can win you cheaper premiums and better apartments; a bad score can make insurance more expensive and a place to live hard to find.
Go to one of the main credit agency sites and get yourself a copy of your credit score now. You should get a copy at the very least once per year, I recommend every 6 months to be safe. I know some people who check monthly or quarterly.
I have a subsciption at one of the major credit agency sites that emails me anytime there is any change to my credit file. This is one of the best ways to find out if someone has stolen your identiy before it's too late.
Credit Scores...Why is it important? I had a friend who went for a new car loan a couple weeks ago. He pays his bills on time, never had any credit issues before. Well, the first thing they do when you want a loan is to check your credit score. He was shocked when the loan officer told him he qualified for the loan but the interest rate would be sky high.
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After asking why, he was told his credit score was on the low side. So instead of getting that 0% financing he was hoping for, he was looking at a 13% interest rate. I will let you do the math but 13% on a $40K car is, well, a lot of interest.
Credit scores are easily the most important factor when looking to borrow money. It is important that before you try to borrow money, you get a copy of your credit report and credit score. This way, there will be no surprises or embaressment when you are at the bank or car dealership.
Come to find out that someone had opened up a few accounts in my friends name and never paid what was owed. Identity theft is all the rage.
How Your Credit Score Affects You
If your credit score is high enough, you'll qualify for a lender's best rates and terms. Your mailbox will be stuffed with low-rate offers from credit card issuers, and mortgage lenders will fight for your business. You'll get great deals on auto financing if you need a car, home loans if you want to buy or improve a house, and small business loans if you decide to start a new venture.
If your score is low or nonexistent, however, you'll enter a no-man's-land where mainstream credit is all but impossible to come by. If you find someone to lend you money, you'll pay high rates and fat fees for the privilege. A bad or even mediocre credit score easily can cost you tens of thousands and even hundreds of thousands of dollars in your lifetime.
You don't even have to have tons of credit problems to pay a price. Sometimes all it takes is a single missed payment to knock more than 100 points off your credit score and put you in a lender's high-risk category.
That would be scary enough if we were just talking about loans. But landlords and insurance companies also use credit scores to evaluate applicants. A good score can win you cheaper premiums and better apartments; a bad score can make insurance more expensive and a place to live hard to find.
Go to one of the main credit agency sites and get yourself a copy of your credit score now. You should get a copy at the very least once per year, I recommend every 6 months to be safe. I know some people who check monthly or quarterly.
I have a subsciption at one of the major credit agency sites that emails me anytime there is any change to my credit file. This is one of the best ways to find out if someone has stolen your identiy before it's too late.