Have you ever thought about how a low credit score could take money out of your pocket? The bad news is that there are many ways a low credit score can hurt your personal finances. According to myFICO, a low credit score will result in much higher mortgage payments. For a $300,000 30-year fixed rate mortgage, the difference between a very low and very high credit score is almost $900 a month in cold, hard cash. That's real money and real life if you are in the credit score doghouse.
The good news is that you can do a lot to improve your credit score. First, learn as much as possible about your credit score. myFico's credit education center offers tips, advice, and information. Next, get your credit report and FICO score. You can contact one of the credit reporting agencies for a free report (Equifax, Experian, TransUnion) or a service that monitors your credit for a fee. Be sure to correct errors on your credit report. myFico offers tips and advice to help to correct these errors and how it becomes incomplete or erroneous. Finally, start paying bills on time and stop moving debt around. myFico offers a list of tips for improving your credit score such as payment history, amounts owed, length of credit history, new credit, and types of credit use.
By taking action and getting help, you can get out of the credit doghouse and look forward to lower payments on essentials like a home mortgage and less debt.
Tags: bad news, real money, cold hard cash, payment history, equifax, transunion, experian, fixed rate mortgage, mortgage payments, credit history, credit reporting agencies, home mortgage, year fixed rate mortgage, personal finances, improving your credit score, improving your credit, doghouse