Having a low credit score can have a tremendous effect on your buying power. It can impact your ability to buy a home, ability to get more credit and your ability to buy a car.
Buying a home is an important milestone for most people. Owning a home is part of the American dream and is an important step toward a secure future.
When you are considering buying a home the first thing you should look at is your credit report. A credit score of more than 740 should typically get you the best possible mortgage rate. Any score lower than 740 usually have a significant impact on either your rate or your points. In many cases you might even have to buy mortgage insurance if your score is low.
The majority of lenders in the market will not lend to you at all if you have a score of fewer than 620. Even small increases in your interest rate will translate into a huge amount of money over the lifetime of your loan. Your low credit score will have a profound impact on your ability to buy a home. If you want to buy a home one day you need to make sure that your credit score is as close to 740 as possible.
Having a low credit score will also impact the type of car you will be able to finance. Most people can only afford a certain level of monthly car payment when they go to buy a car. The lower your score is the less you will be able to borrow to buy the car and the higher your interest rate will be. Some car loans an charge almost 25 percent in interest for poor credit buyers.
The combination of high interest rates and smaller loan amounts will necessarily lead to a smaller or older car. More often than not it will be an older car or worst case scenario you will have to buy the car from one of the buy-here-pay-here dealers. Knowing that your credit score might eliminate your ability to buy a decent car and it will impact the quality of car you can afford you need to pay attention to your credit score. If you have poor credit you need to consider credit repair in Austin to help your raise your score.
Having access to credit can be helpful when you are getting married or having a child. Having a low credit score can negatively impact your access to credit and thus put you in a bad situation in the future.
Your credit score can impact your ability to get access to more credit. You might not want to have another credit card now but when you end up in a situation where you need credit you want to be able to access it. Your credit score will impact your ability to get more credit and it will also impact your interest rates. Having a high interest rate can make credit prohibitively expensive for you and your family. If you think you may one day need quick access to credit then you need to keep track of your credit score.
Credit scores are important and they have a great impact on your buying power. Your credit score can negatively impact your ability to buy a home, a car, or simply have access to credit when you need it. Keep an eye on your credit score now, or work with credit repair in Austin if you have already poor credit, so you can ensure that your buying power will not be negatively impacted in the future.
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