Categories
credit credit card credit score

Determine Your Credit Score

It’s easy to say that while you can afford to buy a house, you have to buy a car. For most people, on average, you make about $2,000 a year.

In the United States, you could be paying a little over $2,000 a year in minimum pay. In that amount, you’re sending your family just $3.55 a week. If you have over $2,000 in credit card debt, that’s a lot of money to spend.

But, there’s a serious problem about that number. When you think about it, 30% of all the employers actually hire just 3-4 people every week.

And, the average household spends over $15,000 a year on credit card debt.

If you’re wondering why, this is because the average American household owes over $30,000. That’s a whopping $12,000 a year spent on credit card debts.

Even if all you do it’re buying 4 cards every week, you’ll still spend another $60 a month on interest!

The problem, then, lies in getting out from under those huge payments. Why? Because these 3-4 cards are considered to be your top 2% payments, so it’s pretty easy to miss payments. When you miss a payment, that money is held in your bank account for future checking out.

Even if you don’t ever make that great of your monthly payment amount, it could take you 3 years to pay it off because credit card companies do not automatically pay you back every 3 years. Unless you’re never even aware of the balance on your cards’and you know how to use your credit cards. Plus, their interest rates aren’t that low, and interest-free periods are almost always free.

So why is it that most Americans think that 5-6% of your total payments go towards paying off their credit card debt? There are a couple of answers.

The middle class earners are now being hit with over $3,000 per household in credit card debt; and that brings us on to the problem of making sure you get the minimum payments on each card you’re using.

In most cases, a 2-3% interest rate is only half as high as if you had used your new cards all over again. In addition, if you pay a little over $3,000 in your max payment each month, you’re 100% more likely than other people to make the minimum payments required and still pay out the amount at the end of the month.

Of course, the interest rate on your credit cards may be higher; but you’re still paying out the money you didn’t take on at least as high. If you pay more than $3,000 in minimum, that’s $400 per family that will have been paying $1,241.00 per month. So, if you take that $400 every month and pay it off at a significantly higher interest rate instead of once every 3 years, you would have saved over $400 every year.

No wonder so many people feel the need to switch from paying over $3,000 a year to paying only $3,000! That’s why I have this rule, and it’s the one reason why I’m still working at Sears. It’s because it’s cheaper. My husband made more than $80,000 a year back in 2005. He actually made more per hour.

Keep in mind that people who make $40,000 per year are those most likely to spend that entire amount on interest. Because usually their interest rate is only $6.50. Or, they pay no interest at all!

What’s the Bottom Line? There seemingly is nothing wrong with people making $40, to use their cards, but it can be an expensive habit and can lead you to much bigger problems.

Determine Your Credit Score

Your credit score is a vital factor in your decision to loan out the house, buy a home, or simply run a credit card. Although credit scores are based on one or two points from the population average, there are thousands of possible combinations of these scores. The most commonly used score is the FICO – Financial Shour Rank’.

The FICO scores are intended as a means of determining a borrower’s credit worthiness. Other factors that the score takes into consideration include income, debt (including medical bills), assets, and many other factors.