Your credit score is important. A good score can save you money on loans and insurance. For example, let’s say your score is 700 and your mortgage rate is 4% APR for 30 years on $150,000 loan. The total interest you would pay would be $107,804. Now consider you had a score of 600 and your rate was 6% APR on the same loan. You would end up paying $173,757 in interest. That’s a difference of about $66,000. Now this example is for illustration purposes but you get the point. The better your score, the more you save.
Since your score is so important, we will give it to you for free. Just stop by one of our three locations and we will provide you with a free credit report with your score.
What makes up your credit score?
Your credit score is made up of five components with different weights:35% of your score is determined by your payment history
30% by the amounts owed
15% by the length of credit
10% by new credit
10% by types of credit used
It is also important to know what is not in your credit score. For example, your income is not part of the equation. So you could make a million dollars a year and have a really low score based on the factors above such as poor payment history, too much owed, etc. Also, the score is a point in time and can move up and down. This is especially important if you want to improve your score to save money on things like a mortgage.
APR = Annual Percentage Rate