Managing Your Credit and Rating
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By :
Andrew Shultz
Submitted
2009-12-06 19:15:21 |
Managing your credit well could boost your wealth management portfolio. For example, if you manage your credit responsibly, you are less likely to carry credit card debts and that should save you thousands of dollars in interest payment alone. Also, lower debt means higher credit score and that should save you on the loans such as mortgage and auto loans. You will be surprised to know that just a 50 point drop in your credit score can cause you interest rate to jump more than a point. now that's $1,000 extra in interest on a $100,000 loan. One of the main reasons why people end up in debt is to have a large credit available to them. If you have 10 credit cards with $20,000 in credit limit available to you, chances are that sooner or later you would be tempted to use that credit line and become a victim of debt. Also, once in debt, are you consistently paying only the minimum each month on your credit cards or other debts? This habit can be a critical "red flag." If you can pay only the minimum now, do not increase your debt load. Also, keep in mind that, when you pay only the minimum amount each month, you are paying high finance charges on the unpaid balance. This costs money and delays the achievement of financial goals.
Periodically, get a copy of your credit report and check it for accuracy and completeness. This is especially important before making large purchases where you plan to use credit, such as for a car loan or a mortgage. In many cases credit reports have minor inaccuracies that need to be corrected. Sometimes there are errors that might result in your being turned down for a loan (to correct an incorrect credit report, use the form provided by the credit reporting agency).
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Author Resource:-
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Article From Fiscalwealth | Personal Finances, Investment and Wealth Management
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