Do you know what your credit score is? Many of us don’t have a clue. Now is the time for us to learn that important 3 digit number. All of us know that if a credit score is deemed too “low,” we will have a more difficult time getting loans for homes, cars and credit card approval. We need to raise our consciousness regarding other effects of a bad credit score.
You could be determined to b e a “credit risk” because of your poor credit and low credit score. If you are even offered a mortgage loan, you will have to pay a higher interest rate than someone with a good credit score. If you compare your rate with the rate for a prevailing interest rate. You will find that this will cost thousands of dollars over the life of the loan.
We need to inform ourselves about other areas, in addition to the obvious ones, in which credit scores play a role. Currently the importance of a credit score can impact us in ways that we would have never imagined and might find hard to believe.
Automobile insurance companies will use a person’s credit profile for writing policies. Homeowner insurance underwriters apparently have decided that when you have a low credit score, you will make more claims. Therefore, insurance rates get higher.
We all have concerns about health care. Some people are unable to keep current with life and health insurance payments. Therefore, costs increase for the insurance companies and insurance rates increase. Your poor credit can be affecting these rates.
If you have been denied employment, it is very possible that the employer checked your credit rating. If that rating is poor, the employer may suspect that you would not be a good employee (being dishonest, stealing, taking bribes). So, a poor score might cost you a job.
With the current credit crisis, it will be most important for us to find out our credit score. If it’s low and we are a “credit risk,” we need to repair our credit. It is possible that some of us are in for a surprise and not a happy one.
Please do not ignore your personal financial situation. Remember all the areas of life that are affected by poor credit so work on fixing your situation.