Effects of BAD Credit and How To Repair Your Credit to Improve Your FICO Scores

It seems that as time progresses there is more importance credit score.

Lenders are constantly raising the scores needed to qualify for a financing on anything. The recent "Credit Crunch" is making this move even faster and getting a loan for a car, credit card, business line of credit, or mortgage is getting more and more difficult.

When I started my career in the Real Estate Finance world a 620 credit score would get you just about anything.

Now lenders are looking for a 700 to 720 FICO score to qualify for their top tier programs.

Anything less than that has some rather large adjustments to the pricing and in the long run WILL cost you dearly. Even more so, any scores less than 680 may not even get you a home loan.

Many of our clients are in home loans that have or are about to adjust the interest rate on them. This change in rate and term of the loan will push their payments sky high and make their home unaffordable all of a sudden.

If you think about it, the lender would NEVER, EVER have qualified you or given you the loan based on the new payment they expect you to cover after the rate adjusts.

How can this be?
Who said this was OK?
Does this make sense?

The same is true with Credit Cards. If you have anything negative happen to your credit, all your cards have the right to increase your interest rate and push your payments up accross the board.

It doesn't make sense to us either and this is why we are here. To help you get your life back on track and truly understand the rules to the game.

Lenders are banking on the fact that you don't have a clue.

We have compiled a list of programs with excellent credit, good credit, and challenged or bad credit. The loan amounts and the rate and payments. Here you will see what the true costs of less than perfect credit are and how you can get to the top tier credit and what the savings will be for you in the long run.

Let's take a look at a Mortgage Loan and what the costs are for a $200,000 loan for a standard 30 year fixed Home Mortgage Loan

If you have less than a 580 FICO score and the ability to qualify for a loan by verifying your income, you will not be able to get a standard 30 year fixed rate home Mortgage.

FICO Scores Affect Your Interest Rate and Payment If you have a FICO Score n the range of 580 to 620 your rate on a 30 year fixed Home Mortgage would be around 7.5%.

$200,000 @ 7.5% has a payment of $1,398
Also, the total interest paid out over the 30 years for this loan is $303,433.66 just in interest making the total amount paid back $503,433.66

Credit Scores Directly Affect Interest Rates and Payment A FICO Score in the range of 620-680 would most likely get you a rate around 6.75%

$200,000 @ 6.75% has a payment of $1,297

Also, the total interest paid out over the 30 years for this loan is $266,987.54 just in interest making the total amount paid back $466,987.54

Credit SCORE Affects Interest Rate and Payment A FICO Score in the range of 680 to 700 would get you a rate around 6.25%

$200,000 @ 6.25% has a payment of $1,231

Also, the total interest paid out over the 30 years for this loan is $243,319.13 just in interest making the total amount paid back $442,319.13

FICO Scores on Credit Report Affect Interest Rates and Payment A FICO Score in the range of 720 and higher would get you a rate around 5.75%

$200,000 @ 5.75% has a payment of $1,167

Also, the total interest paid out over the 30 years for this loan is $220,169.94 just in interest making the total amount paid back $420,169.92

Save Money with Improved Credit FICO Score The difference in interest paid out for the loan over the 30 year period from the lowest FICO Score that would actually qualify for a loan to the highest tier 30 year fixed rate loan is a WHOPPING $83,263.72 on a loan of just $200,000.

This is the cost of having bad credit. This is what you can save yourself just by letting us work on your credit for you.