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Is Your Credit Score Costing You Money?
Most of us want a good credit report to obtain automobile
financing, credit cards, and to purchase a home. But, beyond
these consumer loans, your credit report can cost you in everyday
living expenses. What you don't know about your credit could be
costing you money.
Having a credit card means that you can order tickets, rent a
car, and reserve hotel rooms. Besides these conveniences, your
credit report can mean that you must pay higher deposits and fees
for everyday services.
Did you know that your credit history can keep you from
getting utility connections, good telephone rates, the best auto
insurance, home owner's insurance, or even keep you from getting
hired?
Some utility companies set minimum standards for service
connections. If your report shows collection accounts for
prior utility bills, you may not be eligible for service at all.
And if utility companies do agree to connect your service, you'll
need to pay a higher deposit than another customer with good
credit who may not need to make any deposit.
The same requirements exist for telephone services.
People with a good credit history don't need to pay deposits for
home telephone or cell phone services. When we first got a cell
phone with poor credit scores, we had to pay a $300 deposit, for
one cell phone. After fixing our credit, we got eight cell phones
for our business, with zero deposits.
What many people don't realize is that good credit enables
them to get better insurance rates. High-quality, low-cost
home owners' insurance, auto, and life insurance companies set
minimum credit standards for their policy holders; this means
that consumers with poor credit have to pay more for less
coverage. Many automobile insurance companies now base your
monthly premiums on your credit score; these companies offer a
17% discount if your score is over 625 and a 25% discount if your
score is over 725. Why? Because according to their studies,
people who are careful with their credit are also careful with
their property and careful drivers.
Bad credit can cost you a job. More and more employers
run an applicant's credit report and hire the person with better
credit, assuming that better credit equals better integrity and
character. A friend of mine with a Master's Degree and a 4.0
grade average did not get hired; she was told her credit score
didn't meet their minimum standard and that they hired another
person with less education.
Poor credit scores means you pay more for your home
financing. Mortgages cost more in upfront fees and interest
rates for those with low credit scores. How much can you save? A
mortgage loan of $150,000, 30-year, fixed-rate mortgage, interest
rate of about 5.72 percent costs around $870 a month; poor credit
scores raise the interest rate over 9 percent and the payments
over $1,200. As you see from these payment differences, good
credit means that you can finance a more expensive house with the
same income, or save $330 each month.
Boost your credit score so you can save money on everyday
expenses, get high-quality insurance, and the best mortgage
financing.
(c) Copyright 2005 Jeanette J. Fisher. All rights
reserved.
Jeanette Fisher, author of "Credit Help! Get the Credit You
Need to Buy Real Estate," is on a one woman mission to help
people buy their dream home or finance multiple investment
properties. Jeanette teaches real estate investing and interior
design psychology. For help with your credit, visit the Real
Estate Credit Help Center at http://www.recredithelp.com
MORE RESOURCES:
Credit - Google News
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