Understanding Your FInances

One Late Payment Can Affect Credit!

If you have not worked in the credit industry or been around anyone who has been really involved it, you might realize what can and can not your credit.  Did you know that being late on a payment one month could cost you 60-110 points on your credit score????  If you are looking at buying a home, or let alone get some new credit, that can make a big difference if you can get new credit.   AND if you can get the new credit you are probably going to pay a higher interest rate.  Here are some other items that will affect your credit score:

Debt settlement:  45-125 points

Foreclosure:  85-160 points

Bankruptcy:  130-240 points

Maxed out credit card:  10-45 points

The unfortunate thing is that if you do not pay attention to these sorts of things, you could drop from an 800 score to a 600 something FICO score.  That could ultimately affect your decision to use your credit to purchase something.  Money Talk news points out an example if you were borrowing $200K for a home loan, and your FICO score is 620 versus 760, you could end up paying up to $67K for that home loan over the period of the 30 year note.   That is huge!  Just think, what could you do with that amount of money??  Makes you realize that your credit is really something that has to be paid attention to and not taken lightly if you are interested in buying any large items or get new credit.