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Bill Hardekopf on The High Cost of Low Credit Scores and how you can keep control of your finances
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-- -- Alabama right now we have joining us from Skype bill part of cop this CEO of low cards dot com hi films.
I'm Lauren -- -- -- not thick it is.
And the high cost of low credit scores.
It's absolutely.
Obviously everyone wants the best possible credit score -- they can have them when you don't have a good credit score you kind of pay for it right so where do you -- -- start with this.
Annoying -- common topic.
All credit scores are one of the most important mathematical numbers that you as a consumer have.
The best things you can do it and trying to -- up your credit score you wanna get it.
Its highest possible -- they -- 78750.
Is to really take a look at all the debt that she currently have out riot and a native -- and pay it off.
OK and -- would look at the credit scoring now bill.
Or critics.
Scores are -- on the basis of anywhere from 30850.
So do you want half of credit score above 750.
What's considered period to take credit score.
OK.
Very nice stuff continued -- idea what percentages of people have good credit scores.
Or how many.
At approximately a quarter.
About 25% of the people have good credit score conversely 25% of the people.
-- what's considered.
Poor credit score side and number under 620.
So I don't one out of every four Americans need some help in getting their credit score.
Since 2007 have there been a big change in the numbers.
Yes definitely with the economic downturn consumers did have a much harder time keeping their credit scores -- defaulted -- some bills.
It might have been late in paying a lot of bills.
Because of how tough the finances weren't -- Household.
So that definitely decrease their credit scores.
So we're seeing more people that are struggling and that's reflected in their credit -- tell us that three biggest impacts having a bad credit score.
Well the first and foremost one as it is going to affect every interest rate issue you may have out.
If you go foray you're going to get a higher interest rate that most consumers and if you had a bad credit scores and -- -- -- definitely affect you.
Are you with -- you pay on your credit cards.
On what you pay on your home mortgage on what you pay on your are well exactly -- -- your -- right in some cases.
Well -- that can take effect on really any loan that it did you have out.
Your interest rates may -- increased.
If you have a bad credit score.
Right in addition -- can affect you -- employers if you're looking for a job a lot of employers.
Or 60% of employers look at your credit score also.
Yet even when you go to apply for an apartment or to rent the house or something that they technocrats -- huge.
Absolutely OK so so if you do have a bad credit score Hattie -- improving you get a copy of your credit report Friday from all three credit reporting agencies.
Right you get a free copy.
Your credit report from all three agencies -- spread out over the year you get one every four months.
You wanna analyze secretary reports and make sure everything is is true yes -- need to make a plan on how to pay off your debt I don't -- the biggest easy to -- this deep crease the amount of debt that you have.
Secondly pay off your bills on time.
Those are probably the two biggest tips.
You know native plant and then pay it off on time and -- as you know bill doesn't.
It seem like a no brainer.
Why aren't more people doing that.
Well a lot of people just let at a dual slide it accurately.
I have a dramatic effect on your credit score and a lot of people saying gosh you know I can't get to this this this spill over here all right or -- A lot of people just ignore their bills because they get and it kind of downward spiral.
Like the psychology to debt and a lot of people think if they hate ignore it it will go away and it won't.
I now I I understand that and do you think -- deep.
We say Payer bill on time is -- OK just to pay your minimum balance.
Or should you really -- -- you wanna pay as much as possible over the minimum bad policy can start to Whittle away at that balance out but it huge he had paid anything more than Hayden minimum balance.
At least that an -- on time every month.
You right here build a long term relationship with your accounts -- does that mean.
-- -- -- Well hello boy factors in the credit score is how long have a history you have with each -- -- New York City credit card accounts.
If you have all along CF five or ten year relationship.
With that particular issue -- that looks a lot better than if you just had one for say six months -- a particular issue -- if you're hopping around from credit card issuer to credit card -- -- -- out.
A little editing -- your -- us.
All that totally understand how credit cards you have or better yet how many credit cards -- -- use because me I get 20% officer and store -- -- for the credit card never used it maybe once.
That first day but that hurts my credit Kraft.
Will -- It can't hurt your credit you open -- -- -- accounts over -- certain period of time that definitely can hurt your credit score.
What you really probably should do is hang out one -- -- credit cards.
And in use them consistently.
If you have to use them.
But most importantly pay off the balance on time in its entirety every month Bennett credit -- is working for you.
Right OK and last and final question probably the hardest Christian think.
Hello record really interest rates.
Money's cheap.
Why are they not helping the economy and why are people not applying for more loans mortgages whatever it is right now why -- record low interest rates and.
Well I think people got burned during the economic downturn there are so many people that had borrowed so much I think vintages is of the economic downturn and I think we all as consumers.
We all learned a lesson that we can't be.
Over leveraged we can't borrow more -- we can't afford to pay off.
Each and every month so I think consumers are still a little bit stunned by the economic downturn yet and I think we've all learned a lesson that we have to.
Being more prudent -- their finances.
Bill.
-- -- -- CEO of low cards dot com thank you so much from for joining us from Alabama that you nauseated and we're talking about super low interest rates everybody on the day when China made an even lower.
And European.
