Why is this three-digit number so important when you apply for credit?
Your credit score is created from the information on your credit report to assess your creditworthiness. To potential creditors, it’s an indication of how likely you are to repay the debt in a timely manner. As far as numbers go, it’s one of the most important digits that’ll ever be attached to your name. Some of the key aspects of your life it can impact are:
Often times your credit score may not be a true representation of you. There are not many options for getting a home loan with bad credit or much of any types of financing with poor credit. Look at the difference below of how much a credit score can affect how much you will pay in interest.
On a $325,000 loan You may not qualify or
the interest rate will be 6% or above making house payments $2,060 monthly over 30 years will have paid $414,000 in just interest.
Car loan for $25,000 at 15% over 60 months will cost you $35,700 through the life of the loan
Insurance on home and car will cost you an average of $5,200 per year
On a $325,000 loan Your interest rate will be around 4% making house payments $1,530.00 monthly and over 30 year loan term you will have paid $233,000 in interest.
Car loan for $25,000 at 3% over 60 months will cost you $26,900 through the life of the loan
Insurance on home and car will cost you an average of $3,700 per year
You can search, compare and negotiate mortgages all you want, but your credit score will have such a significant impact on the type and cost of the home loan, that it becomes one of the most important factors in getting the mortgage. Not everyone may qualify to buy a home because certain credit and income criteria is needed to assure mortgage companies you have the ability to repay your loan. The higher your credit score, the more negotiating power you’ll have. A lower credit score will mean a higher interest rate on your loan. Generally, if you have a score under 580, you’ll have a tough time qualifying for most types of mortgages. The good news is that your credit can be repaired. It can be very hard to find a reputable credit repair service (there are many) we have only a few we will recommend. Contact us and we will help get you connected with them. Course Bridge has a few staff members that have tried a few different credit repair services personally and we can share our experiences with you. You can check out our “Credit Help & Credit Repair” for more details.