Life with Bad Credit

You can live with credit issues. But every year, life with bad credit will cost you thousands of dollars, making it hard to survive and near impossible to save money for your future. This is one of the fundamental reasons the United States savings rate has stayed under 6%. Many consumers don’t have the extra money to save due to paying thousands of dollars each year in outlandish interest charges.

Since 2010, I have done thousands of financial reviews with clients and most of my clients had no idea how much their credit was really costing them. Sure, they knew that bad credit was causing issues with them getting approved for new credit. But in reality, my clients, like most consumers, never REALLY know how much credit affects their day to day lives.

Bad credit can ruin lives. This is one of the most shocking but REAL statements you might read in a while. The difference between living life and struggling to survive is based completely on credit quality.

Let’s look at a car as a simple example. Most people in today’s society need a vehicle to get around. We require it to get to our jobs, our kids to daycare, or just to get to the store. There are an estimated 250 million car owners in the U.S. alone, so chances are pretty good you are one of them or know someone who is.

Many car owners chose to finance their vehicles and pay monthly payments until the debt is paid off. Car loans are offered to consumers based on their credit history and their credit scores, like most other loans. And based on those credit factors, the risk will be determined by the auto lender and an interest rate will be established for the consumer to pay back that loan. The payments will then be established based on the loan amount, interest rate, and term of the loan.

With good credit, you will get approved for a longer term and better interest rate. With bad credit, you will pay much greater interest on a shorter term, making your payments much higher. Okay, so maybe you already knew all that. Many consumers do, but most don’t know how much that extra interest and shorter terms is really costing them.

A $20,000 car loan with good credit will cost approximately $322 monthly. This is based on a 5% interest rate for 72 months. The exact same $20,000 car loan with bad credit will cost approximately $541 monthly. This is based on a 21% interest rate for 60 months.

This is the same car, but one is costing $219 more EVERY month. The person with good credit will pay $23,184 for their car. The consumer with bad credit will pay $32,460 for the same car. That’s a $9,276 difference. This means the same car will cost the consumer with bad credit 46% more than the one with good credit.

These examples are not extreme. These are based on common interest rates you will actually see on a $20,000 auto loan. Rent and home expenses are other areas where customers get taken for great amounts of interest.

A $100,000 mortgage costs a good credit consumer $577 monthly and $207,720 over 30 years. The same home would cost a family with challenged credit $841 monthly and $302,760 over 30 years. The consumer with good credit will pay $264 less per month and save $95,040 over the lifetime of the loan. That means the person with bad credit will pay $95,040 more in interest for a $100,000 loan, due to their credit.

Credit cards might cost $116 more monthly based on credit. Utility payments are higher, insurance payments are more, and so are many other regular family expenses.

Most people know bad credit has an adverse effect on their life. But the truth is, life with bad credit controls you. Outrageous amounts of extra interest are being charged each and every month. That debt and those higher payments strap most families, forcing them to live paycheck-to-paycheck. If even one emergency arises, many consumers in this position are susceptible to a total financial catastrophe. Life with bad credit is just like a house of cards waiting to collapse.

Consumers with credit issues don’t have high open limits to use in case of emergencies. When a transmission goes out or a child needs emergency dental treatment, payday loans become the only option to get money in a pinch. The rates on those are extremely high, making them almost impossible to pay off.

Life with bad credit is tough, really tough. With no available credit, one emergency can wipe you out. And there is no extra money each month, due to hundreds-of-dollars each month spent on excessive interest charges. Many then are so caught up with financial survival, they forget about how innocently it all began. Instead, they are caught in a trap which few actually recover from.

We work with you to repair your bad credit and will help you raise your credit score. We really want to help people repair their credit and we do so in a very professional way that is really personable. We will work with you to assess exactly where your credit is and where you want it to be. Clean Slate Credit Solutions will help you set goals and then do what we can to help motivate you to achieve those goals.

Here at Clean Slate Credit Solutions, our New Jersey credit repair program charges you per item that is deleted from your credit report. In the event we are not able to get you results, then you don’t pay. So don’t worry about paying month after month with no results. 

Visit www.cleanslatecreditsolutions.com/consultation if you would like to schedule a consultation with our New Jersey credit repair company. Once we speak with you, we will determine we can help improve your credit. Get ready for great credit!

Jose A. Rodriguez Jr.
Credit Repair Expert
Clean Slate Credit Solutions