Loans
Does Your Credit Score Matter?
One of the most disturbing things I hear often is the statement being made by people:
My Credit Score Went Down, But Who Cares?
This cliche phrase sounds more like saying “Hey, we are all going to die some day” and “I am waiting for Govt.. to bail me out.” Although there is some degree of truth in those sentences but at the end of day it amounts to denial of responsibility.
In this post I wish to discuss the parts of your life that get very much affected by your credit score. It is not a small part. It affects the whole you. It hits your home, the card you can drive, the things you can buy and even the jobs you can get into. All spares of your life get affected by credit score.
Impact of Credit Score on Your Home
If you ever want to move out of your parents home and get a decent accommodation of your own, you need a pretty good credit score. You will not be taken seriously by any landlord, mortgage broker, banker or a realtor(real estate professional) if you don not have a decent credit score. so next time when your citi bank credit card bill arrives.. pay it on time for the sake of good future home.
Impact of Credit Score on Your Car
If you don’t care about your credit score, don’t complain when you have the same car payment as your neighbours while he drives a new Lexus and you own that rusting old Chevy. This might be an extreme example but missing one or two payments can cost you 4 , 5 and some times 8 percent on your next car loan. so be careful and pay on time.
How to Improve Your Credit Score
If you have ever tried to lose weight then probably you know how difficult it is to improve your credit score. It is not something you can do quickly. If you try to raise your credit score based on bad advice, you must be prepared for these quick-fix efforts to backfire. If you ask me to put all of the advice in one sentence, I would probably say “Manage your credit responsibly”. It is indeed a uphill task to improve your credit score once it is down. Still following the tips below is very crucial to get your bad credit back on track.
Build a sound credit history
Always pay your bills on time, every time
Nothing ruins your credit report like a delinquent payment or a collection. In 70% cased this is the major negative factor in people’s credit report.
Always take corrective action ASAP
If you missed one or two payments, take corrective action as soon as possible. Longer you delay your payment, worst will be your credit score.
Collection Is Like a Life Sentence to Your Score
If you pay off your bills after they go to collection. It might be too late. Even if you pay, this will stay on your credit report for next seven years.
Collateral for Loan
An old Native American wanted a loan for $500. He approached his local banker. The banker pulled out the loan application and asked:
“What are you going to do with the money?”
“Take jewelry to city and sell it,” said the old man.
“What have you got for collateral?” queried the banker, going strictly by the book.
“Don’t know of collateral.”
“Well that’s something of value that would cover the cost of the loan. Have you got any vehicles?”
“Yes, I have a 1949 Chevy pickup.” Read the rest of this entry
