What if we could show you how to put over $100,000 back in your pocket by doing something 99% of people in your position never take the time or effort to do (would that interest you?). Let us give you two quick examples of what we\’re talking about…

EXAMPLE #1:

We all know the largest purchase you\’ll make in your lifetime is the purchase of a home. As a result, the greatest amount of interest you\’ll pay in your lifetime will be on the loan for that home. Now, you probably already know with a low credit score you\’re going to pay a slightly higher interest rate; somewhere in the neighborhood of between 2 to 3 percent more). However, what few people ever see is the true amount that increased interest actually adds up to over time. After all, the typical American nowadays lives in a world where their only focus when financing anything, is usually only about… The MONTHLY Payment. This type of thinking feels good in the short run but becomes very expensive in the long run. Let\’s take a quick look at some factual numbers as to why with the story of Dick and Jane.

Meet Dick and Jane:

Dick and Jane both bought homes in the same neighborhood, on the same street and for the same price.
Jane had a high credit score and borrowed $180,000 to purchase a 4 bedroom 3 bath home. Because of her high credit score she got a 30 year fixed rate loan at just 5.5% interest. Here\’s what Jane\’s loan looked like: Her loan amount was $180,000. Her interest rate was 5.5%. This gave Jane a monthly payment of $1022.02. Her payments over 30 years totaled $367,927.00. Her interest paid over the term totaled $187,927.00. (Of her $367,927 in total payments $187,927 went to interest) Jane paid for her house twice after interest, but don\’t cringe until we\’re done talking about Dick.

Dick had a low credit score and borrowed the same $180,000 to purchase a 4 bedroom 3 bath home on the same street as Jane. He got a 30 year fixed rate loan as well, but because of his low credit score his interest rate was 2.5% higher (making his rate 8.0%). Here\’s what Dicks loan for the same $180,000 loan looked like: His loan amount was $180,000. His interest rate was 8.0%. This gave Dick a monthly payment of $1320.78 (Note: that\’s about $300 per month MORE than Jane\’s). Dicks payments over 30 years totaled $475,479.00. Dicks interest paid over the term totaled $295,479.00. The problem is NOT that Dick paid over $295,000 in interest on his loan of $180,000. The real issue is that Dick paid over $100,000 MORE in interest than Jane just because his credit score was lower. Let\’s take a look at the total interest they each paid again…

$295,479.00 = Dick\’s total home loan interest paid.
$187,927.00 = Jane\’s total home loan interest paid.

$107,552.00 = Difference Dick had to pay.

The harsh reality is that Dicks credit score cost him over $107,000… But that\’s not even the real tragedy of the story… The worst part is Dick and Jane both had bad credit at the same time (years before buying their homes). The only difference… Jane took action to fix her credit (while Dick didn\’t). Now, ask yourself \”Who got Dicks\’ $107,000 in extra interest payments?\” ANSWER: The Bank And that\’s why banks love low credit scores. Customers like Dick are far more profitable than customers like Jane. All because a lower credit score means they have to pay a higher interest rate and most people like Dick don\’t see the big picture, instead, they only focus on…

The MONTHLY Payment.

Banks make MILLIONS off people like Dick. Even if Dick moves every 7 years or refinances he\’ll, most likely always be in the \”Sub Prime\” category and pay a higher interest rate than Jane. The moral of the story? If you\’ve got a low credit score right now… DON\’T be a Dick. Instead, be like Jane and decide to do something about it. Let\’s move on to….

EXAMPLE #2:

The only thing more costly than the previous story is if you\’re in the business of helping people get the loan for that home and they get denied because of their credit score. All your time and money invested in long term advertising, marketing and PR only to lose the potential commission because the client can\’t get pre-qualified for the home they want. Think about this: how many clients are you losing per year because they can only qualify for home their credit score says they can \”afford\” and NOT the home they really want? Think about that… How many people would buy a home tomorrow if they could get a better rate and therefore qualify for the home they WANT instead of the one their credit score \”says\” they can afford?

Think about it. How many more deals would you close per year? If your commission on the loan is $3600 it\’s a lot of money. But more importantly, how many $3600 commissions are you LOSING each year because of your clients\’ credit scores? TEN? You\’re LOSING $36,000 a year – ($3600 x 10 ) TWENTY? You\’re LOSING $72,000 a year – ($3600 x 20) THIRTY? You\’re LOSING $108,000 a year – ($3600 x 30)

Think about it… Just 30 loans a year lost because of the clients credit score ends up costing you over $108,000. That\’s a lot of money… Now, imagine if you had a way to TRULY help those clients improve their credit scores so they could be approved instead of denied? We\’re talking about a REAL SOLUTION that actually helps them rather than one which just mails \”dispute letters\” to the credit bureaus on their behalf. What could that be worth to your bottom line this year? Next Year? .

We\’ve identified the problem of bad credit and just how serious it is (not to mention, expensive). But before we move on there\’s FIVE other ways a low credit score will make your life miserable if you don\’t fix it. Listen… we both know life is already challenging enough and the last thing you need is people using your credit score to make it even more difficult. But unfortunately, this is exactly what\’s happening. For example:

1) Over 50% of Employers Now Run Credit Checks on Job Applicants. This means if you lose your current job, your credit score may be used against in the case of a new employer reviewing you for a position. If your credit is bad and another applicants\’ is better… you can only imagine who will get the job.

2) More Landlords Are Now Running Credit Checks than Ever Before. If you lose your home or the rental you\’re currently living in (or choose to move to a better area), your new landlord is far more likely to run a credit check on you. Again, if your credit is bad and another applicants\’ is better, you can only guess who\’ll get the keys and who won\’t.

3) Most Utility Companies Now Require Deposits From Low Credit Score Customers. Water, Gas, Electric, Trash and Cable, just about all utility companies now require their low credit score customers to put up deposits, before turning on services. In some cases these deposits are hundreds of dollars and can take years to get back.

4) Most Auto Insurance Companies Are Now Running Credit Checks on New Applications. It sucks, but if you\’ve got bad credit, you\’re going to pay more for auto insurance in almost every case… plain and simple.

5) Bad Credit WILL Cost You A Fortune in Business. Getting any kind of unsecured credit to grow a business is much more difficult if not impossible with bad personal credit. And, don\’t think for a minute you can legitimately build a corporate credit profile to get around this… most every merchant account now requires a personal guarantor. So, now you know all the ways a low credit score is going to make your life even more difficult and cost you a fortune (but only if you do nothing about it). So, don\’t get mad and don\’t get depressed… now we\’re going to get into the truth about what you can do about it because in today\’s \”information age\”… When you CHANGE your credit score… …you CHANGE your life!

Author Bio: Jay Peters is the founder of Credit Repair Publishing and has been publishing credit repair information since 1994. For their free eBook titled \”28 Credit Secrets the Banks,Collections Agencies and Government Don\’t Want You to Know!\” Visit their website at: http://www.creditrepairpublishing.com

Category: Finances
Keywords: credit score,low credit,low credit score,interest rate,bad credit