Typically, when we talk about credit repair, the scenario people will picture is someone with REALLY bad credit getting help to improve their scores. Yes, this is a situation that we tackle each and every day. We’ve taken thousands of clients and brought their scores up from the “basement” into the “penthouse”.
However, there is another scenario that people don’t tend to consider, even though it can cost a consumer thousands and thousands of dollars annually.
Let’s consider a situation where your scores aren’t horrible, they are just a little bit low. Perhaps they are in the range of 580-620 due to a few late payments in the past 12-24 months or an old collection account that continues to linger. With scores in this range, you probably could find a lender willing to extend you credit for a car or perhaps even a home. You might even be happy to discover that you qualify for the financing and credit repair never really crosses your mind.
But here’s what you need to understand…
Because your scores are near the bottom of what is acceptable by lenders, they will perceive you to be a bigger risk. That means they will charge you significantly higher interest rates. You know those low rates you hear about on TV and the radio? You won’t get those rates. You’ll get rates that could be a full percentage point higher, or more!
So how does that affect your finances?
Well, if your home mortgage is around $300,000 and you end up paying just 1% higher due to your low credit scores, your monthly payment will be $150-200 higher than someone who has excellent credit (720+). That’s $1800-2400 more every single year. Over the life of the loan, you’ll pay $60,000 – $65,000 more. Yes, it’s true that you could refinance the loan someday if your scores go up on their own, but what if interest rates are higher then? You literally could be stuck overpaying for your mortgage for as long as you own the house.
But that’s not all…
Even if your scores are just “a little bit” low – perhaps around 640-660 – mortgage lenders will still charge you more than they would if your scores were above 720. It’s just how it works! People with lower credit scores pay more for financing.
Conversely, a few months in our program BEFORE you buy the house could get your credit scores up to the point where you could avoid the higher interest rates and save all of that money. So paying a few hundred dollars now and taking a few months to improve your scores could save you years of higher payments.
We think it’s a “no-brainer”. How about you?
Call us if you have any questions and we’ll explain exactly how our program works and how we get your scores into that “excellent” category!