Most of us need a good credit report to get a loan for a car, get a credit card, or buy a house. But your credit report can cost you money in other ways that aren't related to loans. If you don't know enough about your credit, it could cost you money.
If you have a credit card, you can order tickets, rent a car, and make hotel room reservations. In addition to these benefits, your credit report can mean that you have to pay higher fees and deposits for everyday services.
Most of us need a good credit report to get a loan for a car, get a credit card, or buy a house. But your credit report can cost you money in other ways that aren't related to loans. If you don't know enough about your credit, it could cost you money.
If you have a credit card, you can order tickets, rent a car, and make hotel room reservations. In addition to these benefits, your credit report can mean that you have to pay more for everyday services, like deposits and fees.
Did you know that your credit history can make it hard for you to get utilities, good phone rates, the best auto insurance, home owner's insurance, or even a job?
- There are the same rules for phone services. People with good credit don't have to pay deposits for phone service at home or on their cell phones. We had bad credit, so when we first got a cell phone, we had to put down a $300 deposit for one phone. We got eight cell phones for our business with no deposits after we fixed our credit.
- Bad credit can cost you a job. More and more employers look at a job applicant's credit report and hire the person with the best credit. They do this because they think that a person with better credit is more honest and trustworthy. My friend who had a 4.0 grade point average and a Master's degree wasn't hired because her credit score wasn't high enough. Instead, they chose to hire someone with less education.
- Some utility companies have minimum requirements for how people can connect to their services. If your report shows that you haven't paid your utility bills in the past, you might not be able to get service at all. And if the utility company does agree to connect your service, you'll have to pay a higher deposit than a customer with good credit, who may not have to pay a deposit at all.
- If you have bad credit, you will pay more for your home loan. People with low credit scores pay more in fees and interest rates up front and over the course of the loan. What can you save? A 30-year, fixed-rate mortgage for $150,000 with an interest rate of about 5.72 percent costs about $870 a month. If you have bad credit, the interest rate goes up to over 9 percent and the payments go up to over $1,200. As you can see from the different payments, having good credit lets you buy a more expensive house with the same income or saves you $330 each month.
- As you can see from the different payments, having good credit lets you buy a more expensive house with the same income or saves you $330 each month.
Raise your credit score so you can save money on everyday costs, get good insurance, and get the best deal on your mortgage.
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