Are you one of those people who plan to go through life with bad credit? From credit cards to mortgage loans and everything in between, people with poor credit pay much more for goods and services purchased over time than those with excellent credit. The information below should convince you it’s time to earn and keep an excellent credit rating to save yourself thousands of dollars over your lifetime.

Credit Cards: Almost all credit card agreements come with a “universal default” provision giving the credit card issuer the right to raise the cardholder’s interest rate if he misses a payment or defaults with any creditor whatsoever, be it on a mortgage or auto loan or other credit card. Many credit card issuers review their customers’ credit reports on a regular basis looking for negative information. If they find a cardholder who has accumulated too much debt or defaulted with another lender, they reserve the right to raise the interest rate on the credit card significantly, sometimes from a low 5% to an unbelievable 30%. Those who carry big balances on their credit cards month-to-month can be financially devastated when their low credit scores result in a huge interest rate hike adding $10 to $400 a month onto the minimum credit card payment.

Employment: Although it is illegal for employers to discriminate against those who have filed bankruptcy, employers can and do discriminate against those with bad credit ratings, they just don’t admit it. Since so many employers refuse to say anything at all about the work performance of their employees to protect themselves from lawsuits, prospective employers have no way of assessing a potential hire’s character other than how they pay their bills. So employers look at applicants’ credit reports. If an applicant has a bad credit rating, the employer assumes he has a bad character, so he he might not get the job.

The military routinely disciplines its personnel for not paying their debts as agreed. In fact, one can be denied enlistment or dishonorably discharged for having a bad credit rating. Naturally, the FBI and CIA also discriminate on this basis, as does many government agencies. One can’t work for a bank or other financial institution if one’s credit report reveals too much debt or negative information.

Editor’s note:

We at Jewelry Outlet always want to remind our customers why it is important for them to obtain and responsibly use credit. One helpful way to improve one’s credit is by adding a trade line and then only using a small portion of the trade line. This is an example of utilization, which is 30% of the credit score calculation. Thus with a top score of 850, the utilization category is 255 points of the total credit score (850 x .30).

If someone had one department store trade line of $500, but had maxed out the trade line by charging $500 of goods and services, then this person would lose almost all of the 255 points (out of 850), having a very high utilization of 100%. Thus assuming all other things on the person’s credit report were good, the highest credit score this person could achieve might only be 595 (850 – 255), as this person might lose all points for having a high utilization.

But if this person obtained another trade line (maybe a jewelry store account) for $5,000, now the person’s utilization would be only 9% ($500/$5,500). Thus this person’s credit score would increase, maybe by as many as 200+ points, possibly bringing the score up to over 800.

The person’s interest rate on an auto loan with a 595 score might be as high as 20%, whereas the interest rate with an 800 credit score might only be 2% to 5%. If someone purchased a $20,000 car, the lower interest rate would save $250 per month, for having good credit and low utilization.

This is the power of low utilization. And this why it is important to obtain a jewelry store trade line with a high limit.

Jewelry Outlet is the number one online jewelry retailer to help you enhance, establish and/or rebuild your credit. We offer easy credit terms for people with bad credit, new credit and no credit. Click here to Apply for Credit

Posted by Christian C Culpepper