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Key Factors That Affect Your Credit

Buying A Home

A consumer with good credit can potentially save hundreds of thousands of dollars!
As an example, on a 30-year home loan of $225,000, a good credit rating allows a consumer to qualify for an interest rate of 5.5% and a monthly payment of $1,278 with total interest paid of $234,907. A lower credit rating could result in an interest rate of 7.5% and a monthly payment of $1,573 with total interest paid of $341,366. In this example, good credit could help you save more than $105,000 over the life of the loan.

Buying An Automobile

Good credit also leads to lower interest rates on car loans. Banks, car dealerships, and other lending institutions can offers rates as low as 6% with good credit and rates as high as 16% with poor credit.
Keep in mind, consumers with good credit can take advantage of extremely low financing (0% - 2.9%) from auto dealerships directly.

Getting A Credit Card

Credit card companies generally offer their best deals and incentives to consumers who have proven they can responsibly handle credit. Consumers with good credit scores can expect to get a low interest rate credit card that includes perks such as a 0% introductory offer and cash back or rewards points on all your purchases. We have selected the cards we believe offer the best value in terms of APR, annual fees, and cash back or bonus point plans.

Building A Business

The majority of businesses are built on borrowing capital. Businesses often keep credit lines available for everyday operations and/or emergencies. As with interest rates offered on credit cards, good credit allows consumers to borrow capital for businesses at low, competitive rates.

Getting Insurance

Home and auto insurers may look at credit scores before deciding if coverage will even be offered, and then at what premium.

Several years ago, insurers decided there was a correlation between credit score and losses, and that people with higher scores filed fewer claims. That's possibly because habits from responsible credit use - like paying on time and refraining from taking on too much debt -- may carry over to responsible driving and homeownership. Hence, the better rates for better scores.