Want To Save Thousands Of Dollars? - Yeah, We Thought So. Time To Talk About Credit Scores.Credit scores are something that we have all heard about. But what exactly are they and why do they really matter all that much? How would you like to pay $75 a month more for a car than someone else who bought the exact same car for the exact same price? Well, that is exactly why your credit scores are so important and why if you haven’t already – you must learn to be concerned with them. Your score is the primary indication that most lenders use to determine the amount of interest that you will have to pay for using their money. Kind of like in betting, you want to know what the odds are before you risk your money. Your credit score or FICO, as it is also called, is precisely what lenders look at to see what the odds are of you paying them back. If the odds look good (meaning you have a high score) they are willing to settle for you paying them a lot less to borrow the money. On the other hand, if the odds of you paying them back don’t seem good (meaning you have a low score) then they will want you to pay them more each month to use their money. This money you are paying them is of course what interest is. Your FICO is measured on a scale of 300 – 850 and the higher the better. It is important for you to obtain your credit score so that you know where you stand and can measure your progress going forward. There are three companies that keep a credit profile and beacon score on you. Lenders can use any one or all three of these scores to make decisions about you. Remember they choose which of the credit reporting agencies they will use –not you, so it is important to know what all three are and to make all of them as good as possible. A 100 point difference in your score can mean: $40/month difference on an $18,000 car loan…..that’s almost $500 a year. $267/month difference on a $200,000 mortgage…that’s more than $3,300 a year. Managing your credit can mean the difference of thousands of dollars over the course of a year. Extra interest that you have to pay for having a low score is just one more thing that can be a major roadblock on the path to personal financial freedom, so make good use of the related page links to learn how to improve your credit and protect it - it is an invaluable asset!
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