The Higher The Better: The Lifecycle of a Credit Score

THE HIGHER THE BETTER: THE LIFECYCLE OF A CREDIT SCORE Isn't your credit score just something that hides away in the drawers of the three major credit bureaus? Nothing you need to worry about, right? You might want to take a closer look, because throughout your life your credit report may be pulled for a number of milestones... ................. . ........ AVERAGE NEW FINANCED CAR LOAN: BUYING A CAR $26,648 45% = $1,000 of auto loans in Q1 2013 went to subprime buyers TIP Consider setting a time limit within which to shop for and purchase your car. There is a window (varied by credit scoring system) during which all auto loan inquiries count as one inquiry, protecting your score. 1 IF YOUR PARENT(S] COSIGNED ON YOUR PHYING FOR COLLEGE 1MISSED It may only take FOR COLLEGE 1 MISSED OR STUDENT LOANS, A LATE PAYMENT LATE PAYMENT COULD to ding your score HURT MOM'S OR DAD'S SCORE! THAT'S FOR THE LIFE OF THE LOAN: a missed payment 8888 8 YEARS Z888 in is still a missed payment 2 One study found that student loan debt may cost as much as $208,000 for an average household 3 TIP Consider automatic debit payments to help prevent missed due dates. Ш ........................ ............................................. RENTING AN APARTMENT BUYING A HOUSE CONGRATULATIONS you'e ready to buy your frsthome! But if you need a mortgage, the Mortgage lenders typically pull all 3 CREDIT REPORTS AND ALL 3 SCORES - for each person on the mortgage – to aid in their lending decision loan company will check your credit score to help determine your interest rate MANY RENTAL COMPANIES PROVIDING A LOW RATE: НОРЕ THAT THEY LIKE WHAT THEY SEE, REQUIRE A CREDIT CHECK Average in in ON POTENTIAL TENANTS 30-YEAR 4.6% July 3.9% July UP FROM FRM was 2013, 2012 ............................. Once you land a place, Here's an example from a lender as of September 12th, 2013: ON A $500,000, 30-YEAR FIXED MORTGAGE: DON'T FORGET RENTER'S INSURANCE A LOWER credit score such as: An AVERAGE credit score such as An EXCELLENT credit score such as - your credit score could affect your annual payment 649 620 680-699 740+ Interest Interest Interest 5.2% 5.1% 4.7% rate: rate: rate: MONTHLY RATE: MONTHLY RATE: MONTHLY RATE: TIP $2,208.81 $2,177.95 $2,086.59 You may wish to request that the credit check be the final TIP step in your approval process. Alternately, landlords may (but are not required to) accept a credit report you provide., Consider combining homeowner's insurance with auto insurance – you may be able to save depending on your provider. 10 #6 C GETTING MARRIED ............................................- --........--........ "FOR RICHER OR POORER" Percentage of men consider credit scores during dating PROBABLY IMPLIES “IN GOOD 57% CREDIT AND BAD," TO0, RIGHT? YET ONE SURVEY FOUND THAT 20% 30% OF WOMEN OF MEN of women 11 75% do the same WOULDN'T MARRY SOMEONE O WITH A POOR CREDIT SCORE Getting married may not directly impact your spouse's credit score, but joint accounts or lines of credit can! 12 TIP A stickler for credit scores? There are dating sites that let you 13 weed out potential mates by their (albeit self-reported) scores! 553 590 626 683 720 764 One study found that every .............. STARTING A BUSINESS $1,000 You might be an avid saver, inheritance recipient, VC SUccess story, or the apple of an angel investor's eye *****........**...................... ..................................*. in credit card debt decreases a small business' chance of survival by IF NOT IF NOT, A BUSINESS LOAN IS USUALLY IN ORDER TO GET STARTED OPEN ............ Your credit scores play a factor in the size and interest rate of that loan 2% 14 TIP Look into an EIN (Employer Identification Number) to 15 separate your personal credit from your business' credit. #3 # # # # # # # NEW BABIES COULD AFTER A FEW YEARS, IT'S HAVING A CHILD IMPACT YOUR CREDIT NOT ONLY YOUR SCORE -.. ........................-- --- SCORE IF YOU HAVEN'T BUT YOUR CHILD'S IDENTITY BUDGETED PROPERLY AND RELY TOO HEAVILY ON LINES OF CREDIT YOU CAN'T SUPPORT THAT YOU NEED TO THINK ABOUT! One report found of children may be victims that about of 10% identity theft 16 + + + TIP Identity theft against children can easily go unnoticed if they haven't applied for credit or bank accounts yet. Think about checking your child's personal credit report by age 16. 17 Retirement doesn't make financial concerns .................... RETIRING go away-they may even be greater. TIP TOP 2 FINANCIAL CONCERNS THAT KEEP AMERICANS 50-64 AWAKE AT NIGHT (ACCORDING TO ONE SURVEY) Avoid closing long-standing lines of credit, even if you aren't using them. Closing accounts can shorten your credit history and may reduce your available credit, potentially lowering your score. SAVING ENOUGH 19% FOR RETIREMENT CREDIT CARD 16% 19 DEBT 18 { } BEFORE ANY BIG CREDIT DECISION, CONSIDER PULLING YOUR PERSONAL CREDIT REPORTS AND SCORES FROM ALL THREE MAJOR CREDIT BUREAUS. THESE SCORES CAN HELP YOU SEE WHAT SPECIFIC CREDIT ACTIVITIES HAVE POSITIVELY (OR NEGATIVELY) IMPACTED YOUR CREDIT, 20 SOURCES I htp://www.experian.com/ask-experian/20090318-impact-on-credit-scores-of-inquiries-for-an-auto-loan.html 2 http://www.forbes.com/sites/ashleaebeling/2013/05/13/five-credit-score-misconceptions-that-can-cost-you/ 3 http://www.huffingtonpost.com/2013/08/04/student-loan-debt-lost--wealth_n_3701087.html 4 http://money.usnews.com/money/blogs/my-money/2012/11/19/8--surprising-behayviors-that-may--hurt-0-young-persons-credit-score S http://www.consumerfinance.gov/askcfpb/1305/who-may-request-my-credit-report.html 6 http://realestate.msn.com/article.aspx?cp-documentid=26554459 7 http://www.mint.com/blog/credit/why--mortgage-lenders-pull-all-three--of-your-credit--reports-0413/ 8 http://www.hsh.com/mighst.html 9 http://online2.statefarm.com/bank/mortgageloanestimator/poges/xhtmls/loanEstimator.xhtml 10 hitp://www.consumerreports.org/cro/homeowners-insurance/buying-guide.htm 11 http://money.cnn.com/2013/07/24/pf/credit-score-dating/index.html 12 http://www.consumerfinance.gov/askcfpb/1283/if-i-have-bad-credit-score-will-it-affect-my-fiances-score-if-we-getmarried.html 13 http://money.cnn.com/2013/07/24/pf/credit-score-dating/index.html 14 http://www.entrepreneur.com/article/224518 15 http://www.usatoday.com/story/money/columnist/strauss/2013/04/15/steve--strauss-business--credit-profile/2076887/ 16 http://www.cylab.cmu.edu/files/pdfs/reports/2011/child-identity-- theft.pdf 17 http://www.consumer.fic.gov/articles/o040-child-identity-- theft 18 http://www.strategicbusinessinsights.com/cfd/news/RMJ-V2N2final.pdf 19 http://money.msn.com/credit--rating/credit-tips-for-the-retirement-years 20 http://www.experian.com/ask-experian/20090318-impact-on-credit-scores-of-inquiries-for-an-auto-loan.html FREE ScoresAndMore.com-