Credit – Your Greatest Asset

Credit… Your Greatest Asset

In my first post, I discussed what to look for on your credit report, such as checking for accurate data.  Starting with the basic information like you name, employment, and address.  Then moving on to your payment history to ensure the creditors are publishing the payments and there aren’t any lines of credit open that you are unaware of.

 In my second post, I discussed how to Build or Rebuild Your Credit.  These techniques are basic and can help you whether you filed for Bankruptcy in the past or maybe have never had credit at all.

So… Why is Credit Your Greatest Asset?   

The simple truth is that good credit saves money.  In some people’s minds the system works backwards.  Those that can least afford it pay the highest interest rates and other fees for using someone else’s money.  People that save, spend wisely, and use credit sensibly  are rewarded with lower rates and greater opportunities to borrow money and use credit cards.

As I mentioned in the previous posts, when it comes to buying your home, the difference you pay for your loan may amount to thousands of dollars.  Even starter homes in most markets cost over a hundred thousand dollars, and in many areas they’re far more than that.  Just one percentage point in interest multiplied over the life of the mortgage mounts up quickly.  Additionally, if you are considered a high risk, you are sure to pay more in other fees and be required to take out mortgage insurance.

Too many people concentrate on how much they pay each month for their house, car, or other major purchases.  What they should look at instead is how much the loan is costing them over its lifetime.  Wouldn’t you rather pay $25,000 for a mortgage than $75,000?  Make it your new habit, if you don’t already do it, to calculate how much each credit card or installment loan is really costing you.  Once you start, you’ll be excited to learn how much you can save by using smart financial practices. 

Make it your goal to ensure that your credit truly is Your Greatest Asset.  There isn’t a better win-win situation in which to find yourself.

Why are you not more involved with YOUR credit score?

http://personalmoneystore.com/moneyblog/2009/01/07/credit-part-iii-your-payday-loan-source-shows-how-to-obtain-and-review-your-credit-report/

It’s no secret that your credit score plays a major role in being approved or denied for a loan.  Over the past 2 weeks, I have spoken with about 6 customers that are looking to purchase or refinance due to the great mortgage rates available today.  In most of the cases, the customer has no clue what I’ll find when I pull their credit report.  I tend to ask a LOT of questions to get an idea of someone’s score without pulling the credit (helps with the number of inquiries on your report).  If the customer has no clue and has not purchased anything in quite some time, it makes it harder for someone like me to guestimate the scores and provide an accurate Good Faith Estimate.

Don’t get me wrong, I understand when someone does not know the exact score.  I am referring to anyone who has never looked or taken an interest until the day they decide to refinance or purchase a home.  Not just a home, but any major purchase where financing may be needed.  Back in October, I wrote a few posts about Credit Scores, what to look for, and how to improve them. Within those posts, I talked about what to look for and how to address issues, but I never really talked about who you could contact for a free credit report.  Below should help with your research.

Ultimately, if you are thinking about making a large purchase, you may need to be eligible for a loan.  The Fair Credit Reporting Act (FCRA) was amended to require each credit reporting agency (Equifax, Experian, and TransUnion) to provide a credit report to you each year, at your request, completely free of charge.

How do you get the free credit report?  The three credit reporting agencies have set up one central website, toll-free telephone number, and mailing address through which you can order your free annual report.

One the web:  www.annualcreditreport.com

Telephone:  877-322-8228

Mail in the Annual Credit Report Request Form to:

Annual Credit Report Request Service

P.O. Box 105281

Atlanta, GA  30348-5281

Once you receive your report, call a local Credit Counselor to review it with you and offer assistance.  You may also be able to have a local Loan Officer review the report with you and offer suggestions.  Please note that Loan Officers review credit reports in detail and can offer suggestions, but they are not the experts.  For serious delinquencies, contact a Professional Credit Counselor because they are familiar with credit laws & guidelines.  Somethings can be removed where as others need specific attention.

I hope that you have found this information useful.  Have a question or concern about your credit?  Feel free to contact me and I’ll be happy to assist and/or direct you to a Professional Credit Counselor in your area.