Today I’m posting this guest article written by Ed O’Brien over at creditrepair.org. As I stated in my last  post I’ve had a ton of drafts written up about stuff and one of my drafts related to what you’re about to read. When Ed contacted me about guest posting about repairing your credit I let him know that I’ve actually had fraud committed before on my credit cards; someone maxed my credit card on the other side of the country while the card was still in my purse. I was stunned and scared. Thankfully I recovered every penny because it was fraud that had nothing to do with me. I now have a fraud-victim warning on my credit-report to warn future lenders to ensure that they’re really dealing with ME. But what if I had never noticed it? My credit may have been in the dumps and it may have been years before I would have found out… yikes. When it comes to money it really is in your best interest to keep an eye on your credit report and to have the best credit score you could possibly have, here’s why:

How to repair your credit


Just a Little Credit Repair Can Save a LOT of Money

Your credit score has a bigger impact on your life than you may realize. More specifically, it has a significant impact on the amount of money you pay for certain products and services. With a bad credit score, you’ll end up spending a lot more in interest in the long run than if you raised your credit score by repairing your credit.

Mortgage Interest and Down Payment

A mortgage will probably be the biggest loan you’ll ever borrow. When you borrow a mortgage with a low credit score you will be required to make a higher down payment. You’ll also face a higher interest rate on your loan and a higher total cost of the home.

People who pay the highest interest rate on their mortgages pay tens of thousands of dollars more in interest than those with higher credit scores. Improving your credit score would give you the chance to save that money, or even invest it and earn interest.

Auto Loan Interest

A new vehicle is another significant purchase that presents an opportunity for interest savings. Car shoppers with excellent credit are able to get auto loans with a lower interest rate, smaller down payment, and lower monthly payment due to longer loan term options.

Credit Card APRs

Credit card issuers base their interest rates on your credit score. If you have great credit, you’ll enjoy lower interest rates and sometimes excellent perks like cash back rewards or frequent flyer points. You won’t get the same benefits when you have a bad credit score.

More Ways Your Bad Credit Will Cost

When you have bad credit you’ll also spend more money on:

  • Auto insurance since underwriters use credit scores to decide your insurance rate.
  • New utilities because service providers require you to pay a security deposit when you have a bad history of paying your bills.
  • Cell phones and cell phone service since providers use your credit history to decide whether you can purchase a new cell phone at contract price.
  • Security deposits on new apartment leases. Your rental options may even be limited because many landlords deny applicants with serious delinquencies.

What You Can Do to Start Saving Money

The sooner you repair your credit score, the sooner you can enjoy the cash savings that comes along with great credit. Start the credit repair process by ordering a copy of your credit report. Ask the credit bureau to remove any inaccurate, negative items on your credit report, like accounts that aren’t yours or accounts that aren’t really closed. It’s important that your credit report is accurate since errors can negatively affect your credit score and cause you to spend more money than necessary.

Another step in repairing your credit is paying off accounts that are late. Before you pay, you might ask the creditor to re-age your account or delete the negative information from your credit report. Some creditors occasionally do this as a favor or as part of the negotiation for payment.

Take care of credit card fraud as quickly as possible to salvage your credit rating. Report lost or stolen credit cards immediately or add a fraud alert to your credit report to let other businesses know that your identity has been compromised. You’re not responsible for paying most fraudulent charges, but you must report them to your credit card issuer to keep late payments from being added to your credit report.

 Ed O’Brien is a seasoned writer on subjects pertaining to personal finance, specializing in credit repair. You can find more of his articles at Credit Repair.org.

Ps: IMG source.

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