Save Money with Good Credit

We all know it is important to have a good credit score.  The higher FICO credit score you have, usually means when you are inquiring to borrow money you will get a better deal on the interest rate, which in turn will save you money.  The FICO score runs from 300 -800.  A good credit score is about 700 to 750 which is needed to obtain lower interest rates on loans. 

According to a MSN Money article the lifetime cost of bad credit is $201,172.  The difference you pay each month for having a lower credit score may not seem like a big deal but it can add up to a considerable amount over several years.  Many home mortgages last up to 30 years and many people continue to have car loans over many years.  It is common for people to trade in their car soon after their loan is paid off for a newer car with a new car loan.  It is advised to purchase a less expensive vehicle that you can afford to pay cash for and continue to save money each month.  As your savings increases you can upgrade your vehicle.  

Besides lending purposes, FICO scores are also important when renting an apartment, looking for a job and other aspects of your life.  When a landlord is considering to rent an apartment to you, they may require a higher deposit if your credit score is lower.

If your credit score prevents you from getting certain jobs it may affect your income in the coming years.  The lower income you may receive for a number of years will decrease the total amount of money you will have to spend and save in the future.

One of the best and easiest ways to maintain a good credit score is to pay your bills on time.  If you start paying bills late on a regular basis, your credit score may take a hit.  If you are trying to raise your credit score, make every attempt to start making your payments on time.  You may need to have someone cosign a loan if you don’t have a good credit history.  When someone cosigns a loan for you, they agree to take responsibility for the loan if you should default on it.

It is important to have a good FICO score for more reasons than just lower interest rates.  By having a good FICO score you can save money on loan interest rates, apartment deposits and higher income.