Comments on: The High Cost of Bad Credit http://www.pfadvice.com/2006/03/29/the-high-cost-of-bad-credit/ Bridging the gap between saving money and investing Tue, 14 Oct 2008 07:18:49 +0000 http://wordpress.org/?v=2.6.1 By: makingourway http://www.pfadvice.com/2006/03/29/the-high-cost-of-bad-credit/#comment-1189 makingourway Thu, 30 Mar 2006 04:02:42 +0000 http://www.pfadvice.com/?p=516#comment-1189 Jeffrey, I think you've got a great topic here. I want to very strongly emphasize the cost of credit scores on insurance. I have some friends in the industry and a bad credit score can really increase your premiums. We had an error in our credit report that boosted our auto premiums about 25% each month. It was only resolved when we switched to a carrier that did not use credit scores to calculate insurance premiums. Aahz, good idea bringing up apartment rental. I shouldn't editorialize, but I feel it's important to emphasize the transitory benefit interest rate arbitrage between credit cards and MM accounts yields. With a low limit and having to pay high fees it sounds like you need to concentrate on building up your credit limit - that game is more than likely to hurt it. Earning money and saving it is the key to buiding interest income. But if you really want to make money using OPM, you'll need to start a business or create real estate investments. Credit scores can also influence the deposits you may need to make. If you don't have a perfect payment record with your utility company, they may require you to put down a cash deposit. That could cost $250 or more. Good luck with the topic. Making Our Way Jeffrey, I think you’ve got a great topic here.

I want to very strongly emphasize the cost of credit scores on insurance. I have some friends in the industry and a bad credit score can really increase your premiums.
We had an error in our credit report that boosted our auto premiums about 25% each month. It was only resolved when we switched to a carrier that did not use credit scores to calculate insurance premiums.

Aahz, good idea bringing up apartment rental.

I shouldn’t editorialize, but I feel it’s important to emphasize the transitory benefit interest rate arbitrage between credit cards and MM accounts yields. With a low limit and having to pay high fees it sounds like you need to concentrate on building up your credit limit - that game is more than likely to hurt it.

Earning money and saving it is the key to buiding interest income. But if you really want to make money using OPM, you’ll need to start a business or create real estate investments.

Credit scores can also influence the deposits you may need to make. If you don’t have a perfect payment record with your utility company, they may require you to put down a cash deposit. That could cost $250 or more.

Good luck with the topic.

Making Our Way

]]> By: Aahz http://www.pfadvice.com/2006/03/29/the-high-cost-of-bad-credit/#comment-1188 Aahz Thu, 30 Mar 2006 02:03:09 +0000 http://www.pfadvice.com/?p=516#comment-1188 Let's see... I had to pay a total of $185 (plus $6/month) just to get a credit card with a $200 limit. INterest rate is only 9.9%, but that's irrelevant as I never carry a blance anyway. I also never get to take advantage of those "apply for our card, get a discount deals" that they have at various retailers where you can save anywhere from 10%-20% off that day's purchase if you sign up for a card. I have zero opportunity to play the 0% Balance Transfer/High yield online savings arbitrage game that so many people blog about. Because I can only get the low limit credit card I frequently miss out on great deals that expire only a day or two before my paycheck arrives. With a higher credit limit I could take advantage of the deal on credit and still pay off the card before interest kicked in. Bad credit makes renting a home/apartment MUCH more difficult and sometimes more costly as well. I'm sure there's more, but those are just off the top of my head. Let’s see…

I had to pay a total of $185 (plus $6/month) just to get a credit card with a $200 limit. INterest rate is only 9.9%, but that’s irrelevant as I never carry a blance anyway.

I also never get to take advantage of those “apply for our card, get a discount deals” that they have at various retailers where you can save anywhere from 10%-20% off that day’s purchase if you sign up for a card.

I have zero opportunity to play the 0% Balance Transfer/High yield online savings arbitrage game that so many people blog about.

Because I can only get the low limit credit card I frequently miss out on great deals that expire only a day or two before my paycheck arrives. With a higher credit limit I could take advantage of the deal on credit and still pay off the card before interest kicked in.

Bad credit makes renting a home/apartment MUCH more difficult and sometimes more costly as well.

I’m sure there’s more, but those are just off the top of my head.

]]> By: IRA http://www.pfadvice.com/2006/03/29/the-high-cost-of-bad-credit/#comment-1185 IRA Wed, 29 Mar 2006 17:43:29 +0000 http://www.pfadvice.com/?p=516#comment-1185 Job opportunities. Certain employers (e.g., banks) will ask for permission to check your credit score as part of the interview process. I guess they figure that your more likely to embezzle funds or engage in some other type of illegal activity. Job opportunities. Certain employers (e.g., banks) will ask for permission to check your credit score as part of the interview process. I guess they figure that your more likely to embezzle funds or engage in some other type of illegal activity.

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