Aug 252008

Most consumers know they need a good credit score to get competitive financing. But many people aren’t aware of all the companies that look at their credit scores. So who looks at them?

• Banks
• Mortgage lenders
• Credit card issuers
• Auto insurance companies
• Homeowners insurance companies
• Landlords

Individuals should assume that anyone who asks for a social security number may be checking their credit score. And a superior score equals better terms on mortgages, credit card interest rates and insurance fees. A credit score can also affect whether or not an individual is able to rent an apartment.

A few points can be the difference between a good rating and an excellent rating. Knowing where a person stands on the credit score guidelines will help him figure out how to get where he wants to be.

The higher the score the better rating an individual will receive. That translates into smaller monthly payments with better long-term interest rates.

Savings Example

For example, on a $300,000, 30-year, fixed-rate mortgage:
If your FICO score is Your interest rate is …and your monthly payment is
Actual National Interest Rates – Updated as of July 29, 2008
760 – 850 6.223% $1,842
700 – 759 6.445% $1,885
660 – 699 6.729% $1,942
620 – 659 7.539% $2,106
580 – 619 9.451% $2,512
500 – 579 10.310% $2,702

As seen in this example, a person with a FICO score of 760 or better will pay $264 less per month for a $300,000, 30-year, fixed-rate mortgage than a person with a FICO score of 620 – that’s a savings of $3,168 per year. (

It is essential to improve a person’s credit score if it’s low, and just as important to keep it high when it’s good. An individual should know his or her score and have a plan to protect and increase it. Using CJS can make that process simple and effective.

Douglas Muir, CEO

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