I wanted to pass along this article that I read about the hidden cost of bad credit.

Many people don't realize that the punishment for having bad credit can cost you a life time of high interest rates and payments.

"It's generally accepted that bad credit can cost you, but most consumers fail to consider how much they are actually paying in monthly interest rates, which are higher for borrowers with bad credit".

Source Yahoo Finance – The Hidden Cost of Bad Credit

The article makes comparisons with regard to purchasing a car, home or credit card.

Someone with a 550 credit score or below is subject to the hidden costs of bad credit.

In order to get a home mortgage you will need to at least have a 620 credit score.

Comparing the interest rates of someone with a 720 credit score and both consumer purchased a home for 212,000.  The person with the 620 score would pay $328 more per month in the payment due to the interest rate and $118, 031 over the life of the loan.

The hidden cost of bad credit when purchasing a home can leave you in debt for longer than the 30 year loan.

The extra money that you pay in interest can be cut by paying your mortgage every two weeks.  Check with your loan provider for details.

On a car loan someone with a 550 credit score will pay $10,ooo in interest compared to $1890 for someone with a 720 score.

It's only a little better for the person with the 620 score the interest is $5969.

The article goes on to talk about credit card interest.  The rate for someone with credit the APR is 36%.

The article does not tell you what to do if you have bad credit to improve your credit.

I would suggest that you start with a ssecured credit card from your credit union.

You can put up your own money and get a better interest rate.

The account will also show up as a regular account on your credit report.

After paying on time for a year or longer you can request that the account be transferred to a regular account.

The hidden cost of bad credit can leave you where you may never be able to buy a home, car or credit card.

The hidden cost of bad credit effects you when nothing is done to improve your credit score.   You will become a slave to your debt.

Are the hidden cost of bad credit leaving you in limbo???

Your Financial Coach,

Renee Lawson