Many people don’t really pay much attention to their credit score. That is, until they need to borrow money. While you may think that your credit score is just a three-digit number, it can have a huge impact on your wallet.
Buying A Home
The process of buying a home can be quite complicated. There are many inspections and requirements imposed by the lender. However, you won’t even get to this part of the home-buying experience if you have poor credit. In most cases, a traditional bank won’t approve a loan that they consider risky. And, if they do, they will place you at the highest interest rate allowable, which can put the home out of reach. While there are other ways to purchase a home such as through an FHA, these aren’t without their pitfalls. They have restrictions and caps on a home’s purchase price.
Banks that loan money for vehicles reserve the best interest rates for those with excellent credit. When you have poor credit, you’re really at the mercy of anyone willing to fund a loan. Knowing where your credit score stands can help you negotiate with lenders and make sure they aren’t taking advantage of you.
Once you have a loan in place, you can take advantage of something like the CoPilot car buying site to give you a hand with the actual buying process. With the ability to search a wider range of cars from multiple dealers, you stand a better chance of finding the car of your dreams.
Acquiring a Loan
During the course of a lifetime, most people will need to secure a loan in order to make major home or auto repairs, pay for college or accumulated bills from an unforeseen illness. Typically, you would contact your bank and apply for a loan. However, with a poor credit score, you will most likely not get the approval you need. While there are other lenders online like Payday loans, the amount you can borrow is limited to a few thousand, the interest rate is extremely high and the return payment is due in a matter of weeks.
Your poor credit score will also cost you more when you turn on utilities after buying a home or renting an apartment. Since you are considered high risk, companies can require a deposit to guarantee they have some money in reserve should you decide not to pay the bill. When you consider that you have gas, electric and water bills, this can add up to several hundred for each one.
Whether right or wrong, many of the highly-sought-after insurance companies check your credit score prior to working up the numbers to give you a quote for homeowners, auto and life insurance policies. This can prevent you from getting not only the best rates but also the best coverage and benefits.
Renting an Apartment
You take your time and find the perfect apartment in a desirable location convenient to shopping, parks and school. However, shortly after submitting your application, you receive a response that states your credit score does not meet their guidelines and you receive a denial for your application. Unfortunately, this happens every day to good people who fell on difficult times. Now you have to start the search over knowing that you will have to settle for a place that will accept you.
You see ads every day with regard to multiple cell phone companies offering terrific deals for service. So you decide to check them out and make a switch to save money. However, what you didn’t know is that cell phone companies also check your credit score. So now those great discounts and savings are not something you can enjoy.
Your credit score isn’t just about acquiring the best rates on loans and credit cards. Today, having an unsatisfactory credit report with late or missed payments, or a bankruptcy can also prevent you from landing a job even if you meet the criteria. Unfortunately, companies now use this as a valuable tool to help in the final decision-making process.
When you have an excellent credit score you get access to the best interest rates and securing the money you need is easy. However, if your credit score is poor expect it to cost you more at every turn. It’s important to acquire a free copy of your credit score annually so you know where you stand.