Credit Scoring

Having A Good Credit Rating Can Save You Money

Having a good credit rating will save you thousands of dollars a year on a loan. I conducted my own little experiment on a mortgage calculator and was amazed by my findings.

A loan for $280,000 at 5% was $1,503.10 monthly payment.

That same loan of $280,000 at 9% (which is to be expected with bad credit) was $2.252.94.

That is a total savings of $749.84 a month. It's amazing at the amount of money you are saving over the year, almost $9,000. That is a great reward for having a good credit rating, don't you think.

I don't think I really need to tell you about the benefits of having a good credit rating if you have good credit or if you have bad credit. You are most definitely well aware of all of these benefits.

Good credit rating needs to be discussed with your children, they need to understand why it is important. The best time to discuss this with them would be when they get their first job and begin to earn their own way. At this time they should begin learning how to put money into the back to save, and learn the importance of saving money.

You may even want to help them apply for their first store card, that you monitor. I understand that this may not be the best option for some kids, especially for those girly girls that like to spend lots of time shopping for unnecessary items. But there are ways that you can stay on top of it, by holding it for them, and when they are going shopping they need to give you the money they plan on spending and that is the amount that they are aloud to spend. If this is not something that you think is possible then do not do it. But there is no reason that you can not begin explaining the importance and the proper steps to achieving a good credit rating.

Tell them they need to make their payments immediately when the bill comes it, that by putting it off to the side it will only increase the risk that they will forget about it. Let them know the repercussions of having late payments listed on there credit report. Payment history counts for 35% of your credit score.

Another important piece of information that they should learn is that they need to keep control over the amount of money that they owe out. You need to explain to them how bad it is to max out your credit card other than for the obvious reasons of paying more. When it comes to your credit score, having high balances will lower your score. Your children may not seem to be listening to you, but they children and they are hearing you. You just need to be consistent and remind them as often as you possibly. The will remember everything you say to them about it, because your voice is going to be the one in their head when that bill comes in, or they think they need to get that third store credit card.