I’m positive that you know how important it is to have a high credit score when buying a home. But keeping that credit score high is just as important, because it can impact the price you pay for things that you may not be aware of.
Refinancing Your Home: If interest rates suddenly drop, you may not be able to take advantage of the payment savings if your credit score has dropped significantly.
If you have an FHA loan, the government has lowered the mortgage insurance premiums (MIP) and you could possible save some money by refinancing your loan now.
Credit Cards: If your credit card company provides you with a credit score posted on your monthly statement, there is a twofold reason for that. First, they want you to know what it is to help you maintain a higher credit score. Secondly, it helps THEM keep track of decreasing credit scores too. When you read the fine print, you’ll discover that they have the right to increase your interest rate if your credit score decreases to a certain level —or if you’ve missed a few payments.
Auto Loans: The rates and payments you see on TV are reserved for those who have the highest credit scores. The auto industry says that less than 20% of car buyers qualify for the lowest payment and terms.
Auto and Life Insurance Policies: You guessed it. The premium you pay is also based on your credit score. They may use a different credit scoring system than the one used when you purchased your home. But they usually get their information from the major credit bureaus too.
Cell Phone Companies: Every time you sign up for a new contract, cell phone companies will run a credit report. They want to make sure that you will pay your bill. You may not qualify for some of the promotions they run due to a lower credit score.
Utility Companies: They will check your credit, and while the rates you pay will be the same as everyone else, you may have to pay a higher deposit.
If you’d like to learn about different ways to increase your credit score, please comment on this post or email me to set up a time to talk, or call me with your questions.