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I’m thinking of a number…

 In chiropractic software, Garrett Gunderson

credit numberWhy credit matters and what it takes to get the best rates available.

Do you remember that commercial where the guy says he is thinking about a number between 500 and 800? He was talking about credit. If your credit is good that might not be enough. We have entered an age where it has to be great, but if it is you can look forward to cheaper insurance, lower interest rates and less hassle when you get a loan.

83 percent of Americans have an error on their credit report. ¼ of them are denied a loan they would have otherwise had. By simply having 1 additional point when closing on a loan it can be the difference of thousands of dollars in additional interest. So, whether you have good credit, or less than perfect credit – you may be unnecessarily leaking cash by not taking advantage of what is available to you through your existing lenders in today’s low interest rate environment.

First, go to any of the credit monitoring agencies sites or google credit score and take a look at your credit. Do you see any errors? Misspelled name, wrong address, an account that doesn’t belong to you, or a late payment you didn’t know about. By clearing these issues up you can improve your score. Now, in the past 720 was a magic number for your credit, but if you can achieve 780 or higher there are simply better options and better interest rates available.

After correcting your errors, now you can ask for better interest rates. For example: If you have credit card debt at an interest rate that was determined years ago or that was obtained when you may have had a lower credit score than you do now, you may be able to lower that interest rate. Just call up the credit card company and ask them to send you to the special promotions department or someone who can assist you in changing your credit card. This will send you to the right department that has the authority lower your rate. It’s as simple as knowing how to ask.

Another case where using your credit can help you free up cash flow is in the case of a home mortgage. By calling up your existing lender and asking for a “streamline refinance” you may be able to lower your monthly payment with little cost and minimal effort! Simply ask your lender if you qualify and be sure that they understand that you may consider going elsewhere if they can’t help you. If the situation is right, your lender may lower your interest rate with little to no closing costs or without requiring full appraisal, or without you having to jump through the hoops associated with a conventional refinance.

Always dress up your credit by monitoring and managing it properly. Then ask for lower interest rates, you could save hundreds (or more) of dollars per month on your existing debts!

If you want to know 9 other areas where you can improve your credit, check out our Curriculum for Wealth series where I interview two credit experts and get right to the bottom of what to do. All the information you need in a concise and yes, this is bold, entertaining way.

Read another financial blog by Garrett Gunderson.

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