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In recent years, a simple three-digit number has become critical to your financial life.
This number, known as a credit score, is designed to predict the possibility that you won't pay your bills. Credit scores are handy for lenders, but they can have enormous repercussions for your wallet, your future, and your peace of mind.
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.
Well, I'd like to punch the guy on TV who boasts about his credit score. It's ridiculous! OK, if you have a good credit score, then you're probably have a large income (middle class or above), then you pay less for large purchases. Right? So maybe that's why in today's society, the gap between rich and poor is getting larger and larger! The poor get poorer because they are paying more for their products - I'm no communist, but that doesn't sound fair. Oh well, welcome to the real world. Thanks, Dad.
They only penalize you for being late, however if you make a payment early before the due date you get nothing!! I just found out I had to pay a prepayment penalty for paying off my home since we are moving, they rob you all around. Its sad.
The OP brought up many very good points.
Too add a few points that weren't covered.
1. Keep you debt load under 50% of the credit limit
2. Pull your credit report yearly, there is no charge for the reports, but if it has been a couple of years since you got your "score" or never have, spend the few dollars so you will have a baseline.
You would be surprised how many people that "thought they had good credit because they pay there bills each month" actually ended up with low scores.
This is especially important if you are planning a major purchase(car or home) in the next year.
3. Don't be tempted by those stores that offer you a 10% discount on your purchase if you open an account.
The only time I would be interested is if I wasn't planning on any major purchase for 6 months to a year and I was spending over $1500.
I'm sorry, but taking a hit on my credit isn't worth the $10 or $20 savings.
4. Ask questions when you get a loan, if there is something you don't understand, don't sign anything until they have explained it to where you are comfortable. If they are hesitant or evasive about your questions this should raise some "red flags" Are there other things they are trying to hide?
5. A credit score over 740 just gives you bragging rights, anything over 740 is gravy. ok I am a "credit geek" but I have worked had to get my credit score to 808 and have earned those bragging rights.
and one of the most important tips
6. SHRED SHRED SHRED anything that has personal or credit information on it.
You can get enough information from someones trash over a 1 month period to steal their identity
You can get a free report from all three credit agencies every year. But don't do that - instead, get a credit report from one agency every 4 months! I have been doing this for over a year and a half now. Just keep track of which agency you get the report from - the web site lets you chose one or all three credit bureaus - and start at the first one listed. Four months later - get a report from the second agency listed, and so on.
Well, those credit scores aren't exactly always accurate. I really can't live my life around them. I know of people, whose spouses forged bank loans or took out credit cards without their knowledge. I know of a man whose daugher, took out a credit card against her fathers name.
The problem is that when this happens your not going to put your spouse or daughter in jail. There's a lot you want to do to them, but you just can't do that. So, what do you do? Do you just deal with it or put them in jail. I have a good friend whose brother started to write bad checks. He stole his brothers check book. They look the same and have the same last name. I don't know how this guy did it, but he did!
I even remember when we had a hurricane here in Florida. We were told to stay indoors, had a curfew and the post office was closed for weeks. No electricity or phone for weeks. How can you pay your bills? Well, when I was able to finally get thru to a few of the creditors to tell them about the situation they told us we had a two month grace period and that it wouldn't hurt our credit report. Yeah right, why didn't I tape the phone conversation. I guess you don't go looking for tape recorders or even ask for them to mail you a copy of what they said cause the mail isn't even being delivered at your doorstep! I learned the hard way, cause I checked my credit report and sure enough it came up as more than 60 days late on one of the payments we just couldn't make. It's not like a mailman was coming to my house to pick up the mail...ya know what do ya do?
That's why I don't believe this credit report crap for a minute. If your a victim of credit fraud, and the perpetrator is a family member your just not going to put them in jail. It's happened to so many people, including myself.
Anyway, I have decided to pay for everything in cash. I am not even going to live on credit period. And my home is just about paid off. I can sell it and buy another home in cash. I say credit reports are not always accurate and nobody should really take it into account that seriously.
Angelrocks
If you credit report was showing over 60 days late and you made the payments within 60 days you can dispute it, the creditors don't report till you are 31+ days late so with the 60 day grace period they claimed you were allowed and reniged on it should only show as a 30 day late. which still stinks since they said 60 days but looks a lot better than over 60s
You can even dispute on line
When I worked for the credit card company we would run into "forged"accounts
One of the options was that the balance was put into the persons name who opened the account.
If there is "wrong" information on your credit report you put in a dispute
if you were a "frauded" by a family member and weren't able to get the balance in their name you are allowed to put a statement on your credit report, 100 words I think, explaining the situation.
hope this helps
karla
To the person who gave me a "red dot" neg rep with the comment
Use PUNCTUATION -
You didn;t have enough class to add your name hmmmmm
I have a pretty good idea of who it is
I don't think thats one of the reasons for giving neg reps
If you provide correct information (backed by 30 years in the business)
A neg rep for punctuation, for not adding periods is pretty sad.
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