How your credit looks can affect the way you live your life. Having bad credit can destroy you financially and be the difference between spending and saving some serious dough each month. A prime example of this would be an auto loan.
Cars are necessities. Bad credit will cause you to pay thousands extra on an auto loan compared to someone with good credit. A vehicle that costs $22,000 will cost $379/month for someone with good credit. That’s assuming they have a 5% interest rate and a 72 month term. After it’s all said and done $27,295 will be the amount paid out after interest.
If you have bad credit that same auto loan will cost you $636/month. This is because your interest rate will quadruple to an insane 21% and your term will be shortened to 60 months. The total amount to be paid will jump to $38,210 after interest. That’s over $10,000 more for the same car mentioned above!
The same goes for mortgages. An individual with bad credit and a $100,000 mortgage may wind up paying well over $300,000 in the long run. Bad credit can halt you from being approved and will suck your finances dry due to incredible rates.
Bad credit can be a tough hole to get out of. Making loan payments with bad credit will leave you in a financial battle and make it nearly impossible to save money. It’s no joke, Bad credit is expensive! Aside from being declined and extremely high interest rates, bad credit may be costing you your hard earned money. So what can be done to obtain better credit?
Raise Your Score
Set out on a path to take back your credit. Raising your credit score will allow you to refinance your loans. Refinancing will give you a better rate and ultimately allow you to pay less. Here are some quick tips to raise your credit:
Stay current on all your accounts.
Bring those late payments to a current status and you could see a big increase in your score. Although the accounts can still remain in derogatory standing for up to 7 years, a current account is way more beneficial to your credit than an account that is late or charged off.
Bring down your credit card balance.
Once your credit card balance hits 30% or higher of your limit prepare to start seeing your credit score decline. In fact, the average score for consumers with maxed out cards is 563 (yuck.) Use your cards, but don’t overuse them. Paying your accounts down to 30% or lower is a quick way to boost your score.
Remove Negative Accounts
Removing negative accounts from your credit report can increase your credit score tremendously. You can do this by disputing the negative accounts on your credit report, or by seeking professional help. Better Qualified has a team of credit experts that will go after your negative accounts and point you in the right direction. For a free credit consultation, fill out the form below: