5 Credit Tips Used By The Top 5% To Cut Costs Of Credit And Insurance

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Who would not want to be a master of credit? Who would not want to be able to get preferred auto loans, low interest credit cards, a great home mortgage or be able to buy what you want on credit and have the best payback terms? Did you just shout: "I do" to yourself? That likely means that you do not know how credit is robbing you of money in your everyday financial life. Let me give you some common sense when it comes to wise use of your credit worthiness.

It's a fact that your credit history can stop you from getting utility services like gas and electric with no deposit, an economical phone plan, full auto insurance coverage, low deductible homeowner's insurance, or even to prevent you from getting low interest - no fee credit cards. Here are the 5 tips that can give you the kind of preferential credit that the top 5% of us enjoy:

1. Most utility companies have minimum credit requirements before they will provide services.

If your credit report shows a history of collection of past due energy bills, you might not be eligible for services at all, or, at the very least, they will require a big up front deposit. What can you do about this? Convince a relative or your best friend with good credit to put the utilities in their name, or, back you as a co-signer until you can show you will pay your utility bills on time. 

2. Most telephone/cellphone plans will also look at your FICO credit score.

People with a good credit score do not normally have to put up a deposit for a land-line phone or for a premium cell phone plan. A friend of ours got into trouble with a cell phone company. To get a new provider, he had to put up a $250 deposit. His former cell phone provider reported him to the credit agencies and damaged his score. What can you do about this? As difficult as it may be, you must pay off your current phone provider before trying to get a new provider. As a last resort, you could have someone add you to their cellphone plan.

3. A good credit score means better insurance plans for you.

No matter what type of insurance you are after, good credit will result in doors opening for you that might otherwise be closed or be very expensive to open. These include preferential Life, Health, Auto, and Homeowner Insurance; housing rental insurance; travel and credit card insurance. If you have bad credit or marginal credit you are paying more money and getting less coverage that those of us in the top tier of good credit.

Many insurance providers now base your monthly premiums on your credit score. The cost of doing business with you is factored in based on your credit history. Now, many carriers do offer a discount of up to 15%, if your credit score is over 700, and 22% discount, if your score is 750 or above. They know, from statistics, that people who maintain good credit are also good managers of their property and have few, if any, auto accidents.

What can you do about this? Don't file insurance claims for minor damages or losses you can cover out-of-pocket and drive responsibly. Slowing down, don't drink and drive, and refrain from texting and cellphone use while driving will prevent accidents.

4. Bad credit could hurt your job search.

In the past 15 years, more and more companies are asking for permission to run credit reports on applicants. You have the right to refuse but  that will ensure you do not get considered in the final round for the job. Companies want to hire people with the best credit because, they know from experience, a person who has good credit likely has integrity and good character. Where two applicants are equal in education, the one with the better credit rating usually gets chosen.

What can you do about this? If you have credit problems, tell prospective employers up front when they ask for permission to check your credit. Give them the best explanation you can. They will appreciate your honesty and you might get the job.

5. A poor credit score is already causing you to pay more for all kinds of financial products.

Mortgages, credit cards, gasoline cards, personal loans, all cost more in upfront fees and interest rates for people with low credit scores. Why should this matter to you? A home mortgage of $150,000 at a 30-year fixed interest rate of about 5.79 percent, for a borrower with good credit, has a payment of about $875 per month. That same home mortgage for a person with poor credit brings the interest rate to 8.9 percent and a monthly payment of more than $1,205 per month. You do the math! That monthly difference adds up to thousands upon thousands of dollars over the life of the mortage coming out of your pocket.

What can you do about this? Get better educated about credit and how to use it wisely.

Get advice about getting better credit for free. Just visit Annual Credit Report Scam for free videos, articles, and forum. It's all free and no signup for anything. You can improve your credit score so you can save money on everyday credit costs, get high quality insurance, and keep more money in your pocket.

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