Tuesday, August 25, 2009

Credit Rating

Today I did a home equity loan to consolidate a bunch of small bills, pay off the initial home mortgage and make everything tax deductible. Made good sense all around. When you have a good credit rating you can do things like this and you are offered the best rates right off the bat. The loan closed in 24 hours.

I mention this to make example of why it's important to keep a good credit rating. It's very very important. When your credit rating goes down you pay a lot more for any money you borrow. I pay 3.9 percent on a car loan, they can charge up to 30% for people with a low credit rating.

It can even effect your employment potential, since a lot of companies what to know how you handle your own resources before they let you handle theirs. Especially companies like banks, accounting firms and management positions.

Your credit rating is so important that it's worth the effort to keep up with your payment obligations even if you have to sacrifice somewhere else. Now having said all that, I know there are a lot of people that are in crisis mode right now that's not their fault. The falling economy has cost a lot of people their jobs. When that happens you have to contact your creditors and let them know what's going on. Most of the time they will work with you.

The last thing you want to do is avoid them and hope they will go away, they won't.

Thanks for reading.

Thrifty Panda

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