That Little Three Digit Number

Did you ever think that one of the most powerful three digit numbers in your life would be your credit score? That number predicts to lenders, employers, insurance companies and landlords your character and whether or not you’re trustworthy enough to do business with.

Having a good credit score, upwards of 650, will open doors for you in the world of credit but, anything less than that and you enter into the sub-prime zone and that will be very expensive. Credit scores that are about 580 and below can cost you thousands and thousands of dollars over your lifetime.

Just as a quick example, let’s say you want to purchase a vehicle and the amount you need to finance is $25,000.00. Most manufacture supported lenders like Ford Motor Credit and GMAC offer special financing as low as 0% but, for argument sake, let’s say that if you have good credit you could secure 5% interest. Compared to someone with bad credit, a credit score of around 550, you could expect to pay about 19.95% interest or higher.

On a $25,000.00 auto loan the person with good credit would pay $403.41 per month for 72 months. The total finance charge would be $4045.34. Now, are you sitting down? The person with bad credit on the exact same amount to finance would pay $602.69 per month for 72 months. (That would be if they got approved with no cash down.) The total finance charge would be $18,393.50! That’s $14,348.16 more than the person with good credit! On just one credit purchase, a person with bad credit is penalized $14,348.16!

Now apply this scenario to all of their credit purchases like credit cards, mortgages, small personal loans not to mention higher costs for auto insurance! We’re talking thousands and thousands and thousands of dollars!

How you handle your credit is a very serious matter. The good news is this; you can change your credit situation starting today. The absolute first step you need to take to correct your credit situation is to obtain a copy of your credit report from all three credit reporting agencies, Equifax, Experian and Transunion. You are allowed one free copy of your credit report per year and requesting that copy does not affect your credit score. You can get your free credit report by clicking on the advertisement on this page.

Once you have your credit report, you need to have all mistakes corrected. I promise you, you will find mistakes. The quickest way to get your credit report and to make corrections is to do it online. You can also call each credit reporting agency and they will mail you your report with supporting documents for disputes.

Whichever way you choose doesn't matter, just choose one and get the mistakes corrected first.

If you have questions about your credit situation feel free to contact me.