Credit Score 101: How Your Credit Score is Robbing You
In this session of Credit Score 101, we’d like to introduce you to Sally Payday and Joe Robber.
Sally Payday is a wonderful guest. When she shows up on your front doorstep, she brings a smile, hug, and a bag of cash with her.
Joe Robber, on the other hand, doesn’t knock. He strolls right inside and steals money out of your wallet. Then takes it and runs!
So, who can you expect a visit from? Sally? Or Joe?
Well, it all depends on what credit score Mr. FICO gives you.
Mr. FICO can be a tough cookie, especially if you:
- Forget to pay your bills
- Overuse your credit cards
- Or don’t use enough credit…meaning, you don’t have enough or any
Believe it or not, having debt can be a good thing. Because when you don’t have any, Mr. FICO doesn’t know you exist. Therefore, he can’t give you a credit score—or he can only give you a low one.
And if you have a low score, then, unfortunately, you can expect a visit from Joe Robber. Because a low score means you pay higher interest rates on your house, car, and other loans.
And if you’re paying higher rates, then Joe gets to take more of your money.
Which makes him a very happy man.
He loves stealing all the cash you could be using to save up for a dream vacation, a healthier lifestyle, or a more comfortable retirement.
Meanwhile, Sally Payday takes a different approach.
She doesn’t like to take money. She likes to make sure it stays in your bank account. But she can only visit people who have good credit scores. Because a good credit score means you pay cheaper rates.
And cheaper rates mean lower bills. Which means you can pay for your trip, gym membership, retirement, or anything else that would make your life better.
Sally Payday and Joe Robber are not one-time visitors. They show up on your doorstep every month.
And every month, Sally brings cash, and Joe steals it.
Which one would you rather welcome into your life?
Because it’s really your choice.
Everyone can have a good credit score. Even if you don’t have one now, it’s within your reach. You don’t need to keep letting Joe in the house. And Sally’s just standing there on the sidewalk, ready to present you with a bag of cash.
Want to find out how you can raise your score? Check out some of our other videos on our Youtube channel.
You can also join our live series How to Invest in Real Estate. Every Thursday at 11 AM MST, real estate expert, Mike Bonn answers all of your questions and shares expert tips on improving your credit score, investing in real estate, and building a comfortable retirement.
Happy investing!