Save money because of Good Credit Scores.

Good Credit Scores obviously is to pathway to saving money. You are probably asking why, well the answer is on money borrowed. The average American has to borrow money occasionally for different reason. Let's assume you need to buy a car, and you think your credit score is low. You are considered a high risk and the banks will charge you higher interest on the money borrowed. Maybe you need to get an installment loan from the bank for personal reasons, you may get denied because your credit score is too low. What every your situation is your credit score will determine how much money you have in the bank at retirement. If you think about this it is pretty scary.

Examples of Money lost to High Interest:

Car loan with low credit score:

Loan Amount: $25,000

Interest rate: 12%

Term: 6 years

Payment: $488 per month

Car loan with high credit score:

Loan Amount: $25,000

Interest rate: 6%

Term: 6 years

Payment: $414 per month

*This calculation is a true current market rate calculation for car loans currently.

The difference in payment is $74.00 per month. If you have good credit you would have saved $5,328 dollars. This money could be in a interest bearing account making you some interest as opposed to going to the bank due to your high credit risk. I don't think most people see how bad credit can affect your long term goals. Maybe you have kids and you are trying to save for college, this is quite bit of money you could have saved for one of your kid's tuition. This principle applies to credit cards as well. The worse your credit the worse your terms will be and the more money you throw out the window. Once you see this on paper it is quite scary, but there is help. The road to recovery typically takes about a year, and the first step is to get a free credit check with credit scores. Go ahead and make the plunge and see where your credit report currently stands. I think most people avoid knowing what is on their credit report. No one likes to hear or see bad news. Unfortunately this does not get the problem at hand resolved.

Life is too short and we need to live well so we can enjoy our short stay on this wonderful planet. You might as well make the best of it, and start saving on interest and terms today by being an educated consumer of your personal finances. If you have been avoiding it for a while, go ahead and make that change starting right now. There is nothing like the feeling of going to the bank and not worrying about whether you will get approved or not. With good credit all you have to worry about is what bank will give you the best terms. Remember your "Credit is your Life."