Did you know that 60% of adults don't view their credit score at least once or twice per year? A staggering 58% of consumers have subprime credit scores. As a result, these consumers are being penalized with high interest rates and additional fees that can quickly add up to paying thousands (if not tens or hundreds of thousands) of dollars above what those with solid credit scores pay for mortgages, car loans, credit cards, etc.
While the average credit score in the U.S. is 687, it varies from state-to-state and a recent study indicates that most consumers can't even benefit from advantages like low mortgage rates because their credit score is too low.
Let's take a look at some of the many disadvantages of having a subpar credit score.
Trouble Getting Approved
If your credit score is bad or below average, you may have a hard time getting approved for a loan. Your credit score is a direct reputation of your ability to responsibly borrow and pay back money on time. If your credit score is bad and you have several negative remarks or late payments on your report, lenders will be hesitant to grant you a loan for fear that you won't be able to pay it back with interest promptly.
High Interest Rates
If you do happen to get approved despite your bad credit, you will almost always be subjected to a higher interest rate. The market low interest rates advertised on televisions and in ads will never be applicable to you because as an at-risk borrower, you will have to pay more money over the life of your loan due to interest.
Another thing companies may require you to do if your credit is bad is put down a large deposit in exchange for a product or service. Cell phone, cable and electric companies all peek at your credit when you sign up for an account. If your score is low it can raise some red flags and cause them to charge you an expensive deposit to protect the company.
Don't Settle for a Low Credit Score
If you've been denied for loans or services or receive a high interest rate when you are approved, understand that you don't have to settle for that type of setback and waste your money on interest. It's best to start by checking your credit score and assessing the problems on your report so you can work on improving your credit.
If your score falls below 620 or even below 650, you may want to look into working with a credit repair agency to get back on track. A credit repair agency can help you fix your credit by cleaning up your report, removing inaccurate or expired information, and improving your score with all three major bureaus.
Why Hire a Professional?
There are many reasons to work with a credit repair agency but some of the most important reasons include:
- Getting help from a professional who knows how to get inaccurate remarks removed from your credit report in a timely manner
- Being able to analyze and review all three of your credit reports side-by-side and develop an effective plan of action
- Fixing your report so you can save money by qualifying for lower interest rates when you take out loans
- Improving your chances of getting a better job - Some employers check your credit and use it as a determining factor as to whether or not you will get hired. If you are lined up for a promotion or need a job soon, you can rest-assured knowing that a credit repair agency can take on a majority of the work when it comes to fixing your credit
There are many credit repair agencies out there, but we've taken on the challenge of finding the best ones and providing detailed reviews on each of the top contenders so you can compare offers, benefits, and pros and cons side-by-side to determine which company would best suit your situation. Stop overpaying and take action now as many offer a free consultation.