If you’re trying to save money you’re probably going to cut as many expenses out of your budget as possible.
You can lower your monthly bills by disconnecting your cable, switching to generic products, and couponing but, you may be leaving a large amount of money on the table.
Did you know that improving your credit scores can save you over $1,500 a month?
If you have a bad credit score your in the high-risk category for most lenders, which means that you will be paying a lot more in interest than someone with good credit.
That’s if you can qualify for a loan at all.
The average consumer with bad credit ends up paying $505.47 a month more for a $250,000 mortgage than someone with good credit.
On top of this, the person with bad credit will also need to put down deposits to open utility accounts such as gas, electric, and cable/internet.
Your homeowners and auto insurance will likely be double that of the average person with good credit.
Let’s take a look at auto loans where the average savings on a $35,000 loan can exceed $383 a month for someone with good credit.
Let’s also not forget about credit cards, the average consumer in the US has about $10,000 in credit card debt.
What does someone with good credit save when compared to someone with bad credit?
About $275 per month in interest charges alone.
If you have bad credit, you could be paying $1,500 a month more in interest charges and other fees above what someone with good credit pays.
On top of all of this, having good credit would make you more attractive to employers and possibly increase your earning potential.
If you want to save money you can cut out expenses, use coupons, stop drinking coffee at your local coffee shop each morning, you can even make your own lunch.
But, until you fix your credit, you will continue throwing money away and depriving yourself and your family of the nicer things in life.
So how do you get on the path toward saving $1,500 every month?
1. You can start by paying your bills on time.
Make a commitment to paying every bill by the due date. If you’re past due on your bills, work toward catching up on on them and pay them on time, every time. String together 6 straight months of perfect payment history and you’ll see a dramatic change in your credit scores.
2. Pay down your credit cards.
Not only are your credit cards costing you thousands in interest fees but, if maxed out, they are lowering your credit scores. Paying down your credit cards to a utilization rate of 20% or less will increase your scores get take you one step closer to your goal.
3. Stop applying for credit.
Every time you apply for credit an inquiry is placed on your credit report.
Apply for credit too often and you will make yourself look like you’re desperate for credit.
Applying for credit too often can cause dozens of inquiries which will lower your credit scores.
I know you want credit but, patience is the name of the game. Ideally, you should only apply for credit once every 6 months.
So next time you want to apply for any kind of credit just remember that this application will hurt your credit score and cost you $1,500 a month.
Then, take a deep breath and put the pen down.
4. Fix your past credit mistakes
If you have derogatory accounts such as late payments, charge-offs, collections, judgments, etc… reporting in your credit reports you will need to repair your credit.
CreditFirm.Net has helped thousands of consumers just like you remove negative information from their credit reports and improve their credit scores.
Since 1997, CreditFirm.Net has helped our clients purchase homes, get low interest auto loans, and save millions of dollars by improving their credit scores.
What will you do with your extra $1,500 a month?