LIVING WITH BAD CREDIT
There is always the lender out there assuring you that you can get a loan in spite of having bad credit, damaged credit or no credit at all. Have you ever stopped to think how expensive these loans are? Most sub prime lenders offer these loans at much higher interest rates, normally about three percentage points above the interest rate at which a prime borrower having good credit would get it. In addition, you have to pay a large amount of fee as well. So, in the course of time, by taking these loans, you will not only have the cost of the loan, but the ridiculous interest to pay, which may ultimately result in defaulting on the loan or even bankruptcy. .
At the latest estimate, about 60 million Americans have negative remarks on their credit reports. These play an important role in judging their credit worthiness. Bad credit or damaged credit reflects that you are not efficient in managing your money and paying your debts.
THE COST OF BAD CREDIT
The rate of interest that you have to pay for a lar loan is determined by your credit report. I am going to elaborate the cost of bad credit with the help of a few examples. Credit is very important in an average American’s life. It is hard to live with no credit these days. If you are capable of managing your credit efficiently, then you won’t have any problems in securing quick loans. On the other hand, continuous late payments, incorrect information and mistakes can severely restrict your financial options. Your bad credit may cost you a lot in the long run because your credit score determines your credit worthiness. Generally, car dealers demand higher interest rates because of mistakes on your credit report. In case you have bad credit, then lenders may charge you sub prime rates for car financing. You will no choice but to accept the crazy interest rates or find an auto you can pay cash for. Not many of us can pay cash for an auto, no matter how old. Even with damaged credit, you will have to pay a lot more than others. You can easily calculate how much additional interest you have to pay for the same amount of borrowed money. It may amount to more than $1000 every year in additional interest and more than $5000 extra during every term! It’s not wise to lose this huge amount of additional money simply because of your incorrect negative credit reports. When you seek a home loan with your bad credit report, then the amount of extra interest that you have to pay for it can be enormous. In case your credit score slides down to 640 or even below it, then you will have to pay a heavy interest rate for a home loan or refinance. Forget the loan amount, even the amount of extra interest that you have to pay for it can be enormous if you calculate it on an annual basis. Can you see the impact of bad credit? THE BOTTOM LINE
As you can understand from the above discussion, ultimately your bad credit or damaged credit can prove to be very expensive. The cost of rectifying your credit can also be very high and often you will not have any success in this venture. There are so many people suffering from bad credit that credit repair has become the most searched term on the Internet. Consumers are always looking for quick fixes to rectify their credit scores. The fact is that there are no quick remedies. You can repair your credit score, but it might not get you all the benefits that you expected. Stay tuned for hints about re-establishing your credit.
There is always the lender out there assuring you that you can get a loan in spite of having bad credit, damaged credit or no credit at all. Have you ever stopped to think how expensive these loans are? Most sub prime lenders offer these loans at much higher interest rates, normally about three percentage points above the interest rate at which a prime borrower having good credit would get it. In addition, you have to pay a large amount of fee as well. So, in the course of time, by taking these loans, you will not only have the cost of the loan, but the ridiculous interest to pay, which may ultimately result in defaulting on the loan or even bankruptcy. .
At the latest estimate, about 60 million Americans have negative remarks on their credit reports. These play an important role in judging their credit worthiness. Bad credit or damaged credit reflects that you are not efficient in managing your money and paying your debts.
THE COST OF BAD CREDIT
The rate of interest that you have to pay for a lar loan is determined by your credit report. I am going to elaborate the cost of bad credit with the help of a few examples. Credit is very important in an average American’s life. It is hard to live with no credit these days. If you are capable of managing your credit efficiently, then you won’t have any problems in securing quick loans. On the other hand, continuous late payments, incorrect information and mistakes can severely restrict your financial options. Your bad credit may cost you a lot in the long run because your credit score determines your credit worthiness. Generally, car dealers demand higher interest rates because of mistakes on your credit report. In case you have bad credit, then lenders may charge you sub prime rates for car financing. You will no choice but to accept the crazy interest rates or find an auto you can pay cash for. Not many of us can pay cash for an auto, no matter how old. Even with damaged credit, you will have to pay a lot more than others. You can easily calculate how much additional interest you have to pay for the same amount of borrowed money. It may amount to more than $1000 every year in additional interest and more than $5000 extra during every term! It’s not wise to lose this huge amount of additional money simply because of your incorrect negative credit reports. When you seek a home loan with your bad credit report, then the amount of extra interest that you have to pay for it can be enormous. In case your credit score slides down to 640 or even below it, then you will have to pay a heavy interest rate for a home loan or refinance. Forget the loan amount, even the amount of extra interest that you have to pay for it can be enormous if you calculate it on an annual basis. Can you see the impact of bad credit? THE BOTTOM LINE
As you can understand from the above discussion, ultimately your bad credit or damaged credit can prove to be very expensive. The cost of rectifying your credit can also be very high and often you will not have any success in this venture. There are so many people suffering from bad credit that credit repair has become the most searched term on the Internet. Consumers are always looking for quick fixes to rectify their credit scores. The fact is that there are no quick remedies. You can repair your credit score, but it might not get you all the benefits that you expected. Stay tuned for hints about re-establishing your credit.
