While the nation's credit-scoring program is a critical factor in determining what individual borrowers pay in interest on credit cards and mortgages — and even how much they pay for insurance — new research suggests that most Americans still do not understand how the system works.
Respondents to a recent Consumer Federation of America/Washington Mutual Inc. survey largely did not know that credit scores are derived from payment histories, with many participants mistakenly believing that the number is influenced by such factors as income, age, education, and marital standing.
According to Anthony Vuoto of Washington Mutual Card Services, if all consumers took steps to boost their credit scores by at least 30 points, they together would realize as much as $28 billion annually in savings.
Source: Boston Globe (07/11/08)
MY TAKE: People don't understand how credit impacts them on a daily basis. From the amount they pay for insurance to the 18% rate they have on their car loan. I have had clients walk into my office and not understand why their credit scores are so low when they pay their bills on time. By bills they are often referring to utlity, cable, trash bills, etc. If someone walks into our office with credit issues we recommend credit repair even if we ARE able to get them financed. If we are not able to get them financed we give them a very specific gameplan that will typically help position them to buy a home within 6 to 12 months. We don't see ourselves as JUST a lender. We see ourselves as a partner for their financial future and want to provide as much value as humanly possible in order to turn build a relationship while working on the single largest financial transaction of their lives. I would put that up against an online lender any day of the week.
Kevin Wade
Cherry Creek Mortgage Company
970-243-7800 - Office
970-201-2310 - Cell
kwade@ccmclending.com
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