Bad credit costs you more. It costs higher interest, higher lease payments, higher insurance costs and could even cost you a job.
Here are five real life examples of the cost of bad credit.
- Credit card interest is higher.When your credit is bad, lousy credit card deals will flood your mailbox. One offer gives you $281 in fees plus a $79 application and in the end, you get a credit card with a $19 limit. Some pay as you go offers (where you put money in a deposit first) can cost you $200 – $300 for the set-up of the card.
A good credit score means better options for credit cards.
- Your car payment will be higher.Check out how much your car payments change as your credit scores change at http://www.Myfico.com/helpcenter/autos.
- Your home mortgage will be higher.If you’ve had a foreclosure, missed payments or a bankruptcy, it may be years before you can get a conventional mortgage loan. That’s true even if you’ve been able to improve your overall credit score. It’s still possible to buy a house, provided you can find a seller financing deal or borrow from a private lender. Your interest rate will jump by 2% – 7%.
- You probably can’t lease a car.If you’re able to find anyone to lease you a car with bad credit, they will probably require a high down payment. For the most part, bad credit means no leases.
- Your insurance rates may double or go even higher.Bad credit can also make your car and home insurance rates go up. It’s not uncommon to see these rates go up significantly almost immediately.
High costs come with bad credit. If you’ve got good credit, protect it. If you’ve had some credit glitches, there are legal and ethical solutions you can use to clean up your credit. It won’t be easy. You’ll have to do some work. But the rewards will be worth it!
Want to know more about building up your credit score? Don’t miss this free replay of a powerful webinar.