Credit… Your Greatest Asset
In my first post, I discussed what to look for on your credit report, such as checking for accurate data. Starting with the basic information like you name, employment, and address. Then moving on to your payment history to ensure the creditors are publishing the payments and there aren’t any lines of credit open that you are unaware of.
In my second post, I discussed how to Build or Rebuild Your Credit. These techniques are basic and can help you whether you filed for Bankruptcy in the past or maybe have never had credit at all.
So… Why is Credit Your Greatest Asset?
The simple truth is that good credit saves money. In some people’s minds the system works backwards. Those that can least afford it pay the highest interest rates and other fees for using someone else’s money. People that save, spend wisely, and use credit sensibly are rewarded with lower rates and greater opportunities to borrow money and use credit cards.
As I mentioned in the previous posts, when it comes to buying your home, the difference you pay for your loan may amount to thousands of dollars. Even starter homes in most markets cost over a hundred thousand dollars, and in many areas they’re far more than that. Just one percentage point in interest multiplied over the life of the mortgage mounts up quickly. Additionally, if you are considered a high risk, you are sure to pay more in other fees and be required to take out mortgage insurance.
Too many people concentrate on how much they pay each month for their house, car, or other major purchases. What they should look at instead is how much the loan is costing them over its lifetime. Wouldn’t you rather pay $25,000 for a mortgage than $75,000? Make it your new habit, if you don’t already do it, to calculate how much each credit card or installment loan is really costing you. Once you start, you’ll be excited to learn how much you can save by using smart financial practices.
Make it your goal to ensure that your credit truly is Your Greatest Asset. There isn’t a better win-win situation in which to find yourself.
Posted in Homeowner Tips Tagged: Credit Score
