For example. If you purchase a $200,000 home on a 30 year fixed mortgage at 8% interest instead of 6% (because of your
credit score); that 2% is going to end up costing you a total of $96,934.11 over the term of the loan. Now, think about how
many extra years you'll have to work to pay off $96,934.11 because of an extra 2% in interest?
The part few people talk about is all the other areas in life where a low score will increase your cost of living on an
annual basis. For example. In addition to paying more for a car, home and credit cards, a low credit score will most likely
have you paying more for the following as well:
1.) AUTO INSURANCE. As many as 92% of the 100 largest personal automobile insurers use credit information to underwrite
new business, according to a 2001 study by Conning & Co., an insurance-research and asset-management firm.
2.) HOMEOWNERS INSURANCE. It's thought many insurance companies see a correlation between low credit scores and increased
property insurance claims. Therefore, a low score will result in a higher rates. 3.) LIFE and HEALTH INSURANCE. Customers
who are unable to pay their monthly insurance premium thereby pass along that increased cost to the insurance company whose
stuck with the bill (resulting in a loss for the company). Since customers who pay without lapse are more profitable it is
felt by many that a low credit score now even affects a monthly life and/or health insurance premium negatively.
One of the more shocking areas where a low credit score will you cost you is in the area of employment. It's estimated
as many as 42% of employers now do credit checks on applicants before hiring them (according to a 1998 survey by the Society
for Human Resource Management).
While many employers claim they only do it to verify information on your application (such as where you live and where
you have worked etc.) we can both assume they are taking the liberty to have a peek at how you handle your financial affairs
as well. According to the Public Research Interest Group (PIRG) as many as 79% all credit reports contain errors, 25% of which
are serious enough to cause the denial of credit (according to a 2004 report).
And that's all the more troubling in light of the increasing impact a bad credit report can have, says Ed Mierzwinski,
director of PIRG's consumer program. "It's outrageous that the credit bureaus are claiming their scores are accurate enough
to take people's lives and screw with them like this".
In the next segment we'll be talking about something very, very exciting. It's called...
"Insider Techniques to Raise Your Credit Score... FAST!"
The "CREDIT SECRETS BIBLE" has been in print since 1994 and is
published by Consumer Publishing Group. For more information on the "CREDIT SECRETS BIBLE" click here.