Your loan costs moreĪ strong credit score not only helps you bank with more trustworthy organizations, but also gets you the best loan rates. “Reading the documents and agreements will make it very evident that the mainstream lender will offer you a better deal – that’s simple mathematics,” he explains. Payday loans, for example, are a quick method to receive cash when you need it, but the APR may be as high as 400% to 700%. Ulzheimer advises reading the tiny print before taking out a payday loan, pawn shop or title loan. Mainstream lenders deem you too risky.īecause banks like Citi, Bank of America, and Discover have strict lending criteria, you may not qualify for typical loans or credit cards if you have terrible credit.īad credit limits or eliminates access to mainstream finance, Ulzheimer tells CNBC Select.
Plus, he reveals the first step to regaining good credit. But boosting your credit score takes more than chance, and it requires an awareness of how much your credit score affects your life.īelow, CNBC Select talks to financial expert John Ulzheimer, formerly of FICO and Equifax, on the drawbacks of bad credit. You’ll lose out on these bargains if your credit score is below 600, and you’ll pay considerably higher interest rates on credit cards, loans, and mortgages if your score is below 300.Ī low credit score may make living difficult and even postpone retirement by increasing costs.
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CNBC Select explains the eight major problems of poor credit ConsolidationNow and how to overcome them.Ī strong credit score allows you to get better credit cards, loans, and interest rates. Most Americans today have decent or better credit, but getting there may be difficult.
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