Is Your Credit Score Costing You A Fortune?
While some surveys show that 9 out of 10 consumers are
unaware what their credit score is, I'd like to quickly
share with you how your credit score could be costing you a
fortune (in more ways than you can imagine).
 
We all know a low credit score will make everything in the
world of finance more expensive because of higher interests
rates from lenders due to being considered a greater credit
risk (i.e. higher interest rates on cars, homes and credit
cards). While this may be considered common knowledge by
some, it's truly devastating effects are understood by few.
 
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".
 
 
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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" you may visit:
 
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