The Cost of Bad Credit

October 10, 2019

Did you know that having bad credit can cost you money? Most of know we’ll pay a little extra for not keeping our credit in shape, but how much extra will we pay? Bad credit goes beyond what you pay in interest. It can impact your quality of life. Cell phone contracts, loan rates, insurance. Credit isn’t just a number.

Higher house payment-If you have bad credit you could like pay thousands of dollars more in finance charges.

Insurance- You need to insure your belongings, whether its house, car so if you have bad credit up your premiums will go up. Having bad credit

Having bad credit can make it next to impossible to attain a new car, an apartment, a personal loan or even a home. Even something as simple as getting a new credit card will be out of the question for a consumer with a negative credit history.

Effects of a Mistake and how it affects your FICO score according to money talk news with help from FICO.

  • Maxed-out card: This mistake costs 10 to 30 points for someone with a 680 FICO score, and 25 to 45 for someone with a 780.
  • 30-days-late payment: 60 to 80 points and 90 to 110 points
  • Debt settlement: 45 to 65 points, and 105 to 125 points
  • Foreclosure: 85 to 105 points, and 140 to 160 points
  • Bankruptcy: 130 to 150 points, and 220 to 240 points

The higher your score, the more points you will lose with these mistakes. 850 being a perfect score, you will usually need at least 730 to 760 to get the best rate, depending on lender.

Missed employment opportunity- if you work in a financial sector or some part of the government you may be required a credit check. If you have bad credit it could make you susceptible to financially if you regularly handle money or have a security clearance. Most employers don’t typically run credit checks so it may or may not affect you.

Think of credit like owning a car, you need to regular maintenance it so you can make sure you are in tip-top shape at all times, because if not, you could end up spending thousands of dollars more than your great credit counterpart in your lifetime.

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