One
of the motivating factors behind getting your credit card debt under
control is making sure you don't end up getting yourself into a
situation that negatively impacts your credit score or forces you ino a
category of having "bad credit". Below is a table of information
you can use to assess the true cost of bad credit. Use this as a
motivating factor to get down to business in getting your credit card
debt eliminated and improving your financial situation.
What is the Price you are already
paying for Bad Credit?
If you are
making payments on a car, you are probably paying between $5,000
and $9,000 more in interest just for having bad credit. This
added interest shows up every month in a higher payment.
Credit Status
Rate
Payment
Over 5 years
Monthly Cost of
Bad Credit
Perfect
10%
$424.94
$0.00
$0.00
Mildly damaged
14%
$465.37
$4,722.54
$76.17
Damaged
20%
$529.88
$8,593.30
$138.60
Bad credit in auto
financing can really hurt, but it is nothing compared to the cost of
bad credit when a home is involved. A typical home can cost between
$50,000 and $130,000 more in interest if you are buying the
home with bad credit, as indicated below.
Credit Status
Rate
Payment
Over 30 years
Monthly Cost of
Bad Credit
Perfect
7%
$655.30
$0.00
$0.00
Mildly damaged
9%
$804.62
$50,155.24
$139.31
Damaged
12%
$1,028.61
$130,791.63
$363.30
If you are looking
to make a major purchase in the next 6 to 12 months you should
obtain copies of your credit reports from all three credit agencies
ASAP. You can learn more about obtaining and reading your reports as
well as a variety of ways to dispute negative information by
ordering your copy of "Give Yourself Credit".
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