Money Talks News - Nearly all Americans use credit and have a credit score. But do you know how mistakes, like late payments, or bankruptcy, affect your score?
You will, after this report.
If you use credit, you've got a credit score. It's super important, affecting many aspects of your life from how much interest you pay on loans to how much you pay for insurance.
A few years ago, Fair Isaac, the company that developed the credit score, allowed Money Talks News a peek behind the curtain and showed exactly how much common credit mistakes can mangle your score.
For example, if you max out a card, the cost to your score will be from 10-45 points. The higher your score is now, the more points it will cost.
A 30-day late payment will ding you by 60-110 points.
Settle a debt? That will remove 45-125 points from your score
A foreclosure will cost 85-160 points.
The mother of manglers, Bankruptcy, will lower your score from 130-240 points.
The higher your current score, the more points are taken for these infractions. So if you've got a high credit score, you're going to lose more. A low credit score, you're going to lose less.
However, understanding and maintaining your credit score is super important: Even if you don't borrow money. For more information on ways to do it, visit the Money Talks News website and do a search for "Credit".