Archive for the ‘Credit’ Category

Most people realize their credit score affects their ability to get approved for credit. A lower than average credit score is a warning sign to lenders that you are more likely than most to be late on your payments or default on a loan altogether. Based on this assumption, lenders will either charge you a higher interest rate to account for your high credit risk, or elect to deny you credit outright.

Many of the people trying to clean up credit are looking for a way to improve their credit score for this reason. They are working to get into a new home, purchase a car, or refinance their existing loans, and they realize that by improving their credit score they will increase their chances of accomplishing these tasks and may end up saving thousands of dollars in interest payments.

The benefits of having a good credit score, however, don’t end once you leave the loan officer’s office. Below are 3 more reasons why it is important to keep your credit reports clean.

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The US Treasury Department along with the Ad Council recently launched a new credit education website, located at ControlYourCredit.gov, with the goal of helping young adults learn how to make good financial decisions and use credit responsibly.

The website invites visitors to “solve the great mysteries of credit” by checking them into room 250 of the dark and foreboding Bad Credit Hotel that conjures up images of a ’40s film noir mystery movie. In the process of making phone calls on a classic rotary phone, investigating a transforming Rorschach painting, and using clues found on scraps of paper to unlock a hidden safe, visitors find an interactive tool for calculating the cost of interest, information about their credit history, tips for dealing with debt collectors, and more.

While there is nothing revolutionary about the information contained within the ControlYourCredit.gov site, and the absence of any mention of credit reporting errors is unfortunate, the production value alone is worth a visit and only time will tell if this tactic will be effective in helping educate new credit users.

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