Why A Credit Report Could Be Worth Thousands?
Because your report includes information which will literally affect all aspects of your daily life, like what car you drive, where you live, your employment even how much money you can put away for your children’s education etc.
If your credit rating is good and healthy, you’ll know all you need to do is just to keep doing what you are doing in the right way. However, if it turns out mediocre or bad, you’ll realize that you need some changes even big changes in your life.
It doesn’t matter if you want or not to use credit, life changes always. When you’re married or more new family members coming out, you may desire to buy a bigger house of your dream. If your credit scores keep going down, you will pay a lot more than necessary for your house – if you’re lucky and allowed to make that purchase.
How does it work and Why?
Apparently, the higher your credit scores, the lower interest rates you will get to pay for a mortgage. Lenders are more likely to approve your loan with lower interest rates because according to your report, they can tell if you’re good at money management and financial plans.
Smart buyers would always choose the fixed rate mortgage. Do you know thousands of people are losing their homes every year because they opted for adjustable rate mortgage? Once your life getting worse or you’re expecting some delayed monthly payments, it will only be a disaster if your lender adjust the interest rate of your mortgage.
Let’s check out following numbers and do some easy maths:
If your house costs you $150,000 and the interest rate fixed at 4%, that’s roughly $6,000 for the first year’s interest or $500/month. If you purchase the same house at the same price but pay 6% interest rate, then the first year’s interest will be $9,000 or $750/month. So tell me, what can you do with an extra $250/month?
Lenders love people with excellent credit scores by rewarding them with lower interest rates. This also applies when you’re buying a car, or even furniture.
Lots of people may be thinking that all my bills have been paid on time and I don’t owe any excessive amount, so my credit score should be just fine. They might be right – or not.
Bad things happen. Your credit report could have some errors, by data entry or even in the worst scenario, you could be a victim of identity theft. Anyway, your scores could be totally ruined and you wouldn’t even realize until you need to use your credit.
It’s a smart move that you keep a close eye on your credit report, believe me, it is indeed worth thousands.