Jerry and Linda found their dream home for $120,000 and want a 30-year fixed rate. Their credit rating will determine what their monthly payment will be. Which payment would you prefer?
FICO Score 700-759 FICO Score 500-579
APR 6.456% APR 10.313%
Monthly Payment $755.00 Monthly Payment $1081.00
Difference of $326.00 per month or $3,912.00 per year or $117,360 over the 30 year loan.
Amy and Carl need a new car. You can see how they will save money if they can increase their credit score. Which payment would you prefer?
FICO Score 720-850 FICO Score 500-589
APR 7.221% APR 14.937%
Monthly Payment $497.63 Monthly Payment $593.83
Difference of $96.20 per month or $1,154.40 per year or $5,772.00 over the 5 year car loan.
Automobile Financing:
An auto loan can cost thousands more in interest if you are buying the vehicle with less than perfect credit.
$20,000 auto paid over 5 years
Credit Rate Payment Cost of Bad Credit
Perfect 0-5% $377.42 $0.00
Good 10% $424.94 $2,851.20
Fair 14% $65.37 $4,22.54
Bad 20% $529.88 $8,593.30
WE CAN AND WILL HELP YOU
Are you tired of the creditors and collection agencies harassing you?
Are you paying more in interest rate that you should?
Are you embarrassed by being turned down for automobiles, department store cards, gas cards, ANYTHING?!
Your credit affects more than you think. These are just a few aspects of your financial life that are affected by your credit:
Employment Opportunities:
Employers in today’s market investigate your dependability along with your track record of responsibility based off of your credit. Employers look to see how you manage your personal finances and see whether they can entrust their finances with you as an employee.
Renting Instead of Owning:
The “American dream” is to own a home, but more importantly than having something to call your own is the financial repercussion of renting instead of owning an appreciating asset. The money that you are spending each year in rent could be going into your pocket instead of your landlords.
Interest Rates on Mortgages:
A typical home mortgage can cost hundreds of thousands more in interest if you are buying a home with less than perfect credit.
Interesting reading:
'Universal default' rules explained
By Bill Burt • Bankrate.com
The provision, generally buried in the fine print of your credit card agreement, basically says that if you are more than 30 days late on any payment to anyone, the interest rate on your credit card could shoot up and your credit score may be damaged.
The problem has reached an all-time high, say consumer credit experts.
"Universal default complaints are definitely on the increase -- at a disturbing rate," says Paul Richard, executive director of the San Diego-based nonprofit Institute of Consumer Financial Education. "More than one-third of major credit card issuers now say they act on these clauses regularly." A recent survey found that a staggering 39 percent of credit card issuers said they apply the rule to customers, even if they had no late payments on their own card.
But, Richard adds, many consumers are still unaware of the dangers because they either don't read or don't understand the credit card agreement.
Kelly Rote, communications manager for credit counselor Money Management International, says, "We continually caution consumers to always thoroughly research the terms of an agreement, particularly those with default clauses and those offering zero percent financing. Unfortunately, many of these are not widely understood and could steer people into financial chaos."
It doesn't necessarily take being late on big-ticket items such as a car or a mortgage payment to trigger the default clause, Richard explains. "It could be for something as innocuous as an overlooked $30 phone bill or a forgotten $20 book club subscription."
Powerless to do anything about it
Scott Bilker, financial guru and author of "Talk Your Way Out Of Credit Card Debt," says, "It's one of those new ironclad rules that does not allow much leeway for talking or negotiation. They periodically check your credit file and if you're late paying any other bills, not just theirs, they slam you. Low interest rates enjoyed at the beginning of a credit relationship could, in many cases, double or triple."