Finance And Insurance

Archive for September, 2008

If you’ve never wondered about your credit score, or you have but still have no clue as to what your score may be, now is the time to find out.

Your credit score is determined by information from creditors about your spending and payment habits. That information is sent on to the credit bureaus and the people there create a numerical score for you. Your score is called a FICO score and it effects nearly everything you do from buying a house to getting a cell phone.

Credit scores are like grades for the grown up, and your credit report is like your report card. The higher your “grade”, the better your credit rating. Credit scores range from 300 to 850. If your “grade” is under 700, you should consider some credit repair.

Improving your credit score will get you a more affordable mortgage rate. Since the market is a little shaky right now, and foreclosure instances are up, banks are paying very close attention to FICO scores when applicants come in for a home loan. If you can manage to get a rate that’s only a 2% lower on a 200 thousand dollar mortgage, you will save around 100 thousand dollars in interest!

Improving your credit will also get you lower rates on insurance. Most auto and health insurance companies will run a check on your credit before setting the premium on your insurance. The higher your FICO score the better rate will be. Why? Companies have found that people with a higher scores are statistically less likely to file a claim against their policy. So, they reward consumers with good credit by offering them lower rates on life, health, and auto insurance.

Did you know that many employers are checking credit prior to hiring a potential employee? It’s true. The premise is to verify the information you’ve placed on your application, but they can also view your financial status and determine your ability to be responsible with money and what kind of habits you have with your personal affairs. Employers are less likely to hire a candidate with bad credit because it implies they’ve let things get out of control in their personal financial lives, which in turn indicates they may also be an irresponsible employee.