All right all you spenders, there’s a subject near and dear to me and that’s on the subject of credit. Now you may be thinking to yourself that poor old Frank Money has no life. That may be true but I’m not poor and I’m not in debt, but thinking about the different kinds of debt can really knock me off my feet.
There are costs and benefits for carrying different types of debt. Some credit accounts are viewed more favorably by lenders than others but all require the ability to repay your debts in a timely manner. For example, there’s non-revolving credit like taking out a mortgage that’s paid in installments. Revolving credit deals with credit cards and fluctuate how much you pay each month.
Believe it or not carrying debt and paying it off monthly can raise your credit scores because it clearly shows how you manage your finances. Just remember the higher your credit score the better you can negotiate lower credit rates.
Frank Money here, your financial detective trying to save you money. Ok, listen up all you financial hotdogs out there who don’t pay attention to their credit scores. I’m about to give a lesson in world of hard knocks. Let’s cut right to the chase, bad credit will cost you money. If you’re planning to purchase large ticket items like a mortgage, car loan or even another credit card, you’re going to pay a lot more.
Your credit score under FICO ranges from 300 to 850, with the highest being the best score. I’m guessing anything under 620, you’re going to have trouble even being considered with some purchases without paying extra for insurance of payment.
So pay off your credit cards and get rid of the ones you don’t need. Don’t be late with any of your loan payments, and don’t be afraid to check your credit report, it does not affect your score. It will take a couple of years to build your credit back up to a decent score but it’ll be worth it and that’s coming straight from Frank Money.