Quote:
|
Originally Posted by elsesomebody
NoSoup, I'm not sure I understand your logic for this. If I have a loan that I'm paying interest on, and I have saved up enough money to pay off the debt, and my savings interest rate is substantially lower than the loan's interest rate, I don't see any reason why I wouldn't want to pay off the debt. I have a great credit score, and would like to make it better, but I don't consider it worth paying for. Perhaps what you are trying to say is correct, but only in certain situations?
|
I would recommend this practice to anyone currently trying to improve their score or establish credit history - if already have a very high score as well as a decent or long amount of history, I would agree with you. However, it is much more economically viable to pay the interest on a secured $500 dollar loan over the course of a year and get anywhere from .25% - 3% better on a $30,000 car loan, or even moreso on a $250,000.00 mortgage. It certainly will cost you a few bucks in the short run, but once you make a large (financed) purchase, it has the potential to save you thousands - maybe even tens of thousands of dollars. More than worth the interest paid on the small loan.
Quote:
|
Originally Posted by elsesomebody
Also, with the AnnualCreditReport, can I get my credit reports once every calendar year, or if I get them in December do I have to wait 12 months to get them again? Also, I'm looking at the las ttime I got an equifax report via the free annual credit report, and I don't see where my score is listed anywhere, it just has all the information that I believe is normally used to generate a score. Is there a free way to find your credit score?
|
Although I am not 100% certain, I believe it is only once per 12 months. I would recommend staggering your reports so that you have a good idea if something begins reporting incorrectly - a different companies report every four months should do it.
Unfortunately, there isn't really any free way to see your score. You could certainly apply for a loan (the loan officer would likely be happy to tell you where you stand) but when you do so it does ding your score a bit. The information is more useful to you by ensuring that everything is reporting accurately - knowing your score won't help you improve it. You can go directly to the credit reporting agencies directly and purchase a report with the scores on it, but they aren't necessarily all that inexpensive. However, using this method your score won't be damaged.
Quote:
|
Originally Posted by iccky
What he's saying is that the longer you are making regular, on-time payments on a loan, the more evidence banks have that you can make regular on-time payments and the better your credit score will be. So while it might cost you now, it will be made up for when you take out a home mortagage or some other large loan where a few tenth of a percentage point in interest can mean thousands of dollars.
|
Precisely.
I would like to add, however, that it isn't just a mortgage that it can make a real difference on - mortgages are the most likely candidate, but vehicle loans, or really any loan out there for a significant amount, as well as insurance are all typically based on your score as well.