Credit Scores|Your Key To Early Retirement
Tired Of Working|Want Out|Check Out Credit Scores
You want to retire early. In order to be able to do that you know you will need to accumulate enough money to last at least 30 years. But you never have enough money leftover after expenses to build up your retirement plan to that point. How do other people do it?
Check out your credit scores. Your scores could be destroying any opportunity you will ever have to retire early. Your credit scores could be costing you investment money.
High Scores|High Chances
If you maintain high credit scores you increase your chances of retiring early. The higher your credit score the more retirement investment money you will have available. The financial industry judges you on your credit scores; find extra investment money by protecting them.
One way to avoid damaging your valuable credit scores is by safeguarding your personal information and eliminating identity theft (more on that later).
High Scores|Make A Love Connection
Creditors love consumers with high credit scores. Since you cost retailers and insurance companies less money they will charge you less for goods and services. Credit card companies will also charge you lower interest rates and fees when you have a high credit score.
If you are tired of struggling to find extra investment money, work on your credit scores.
Learn About Credit Scores|Save Money For Retirement
The score that creditors will love you for is above 800. They will give you anything you want if you are at 850. The higher your credit score, the less you pay for goods and services, therefore the more money you will have for your retirement investments.
You control your credit score more than you know. The components that make up your score are:
- Your payment history (35% of your score)
- The amount you owe (30% of your score
- The length of your credit history (15%)
- New credit (10%)
- Types of credit, credit card, auto loan, mortgage loan (10%)
Your payment history carries the most weight because it tells the financial industry a lot about your financial habits. Late payments are the most damaging to your credit scores. One late payment may sound trivial but to credit bureaus it’s a big deal if not cleared up.
Delinquent payments take 7 years to drop off your credit reports. A bankruptcy takes 10 years. That equates to years of money wasted on overpaying for everything. Money that you could have invested into your retirement plans.
The Amount You Owe
Outstanding debt compared to available credit is also damaging. Your score is based on the number of accounts with balances as well as the amount of available credit that you are using. You should keep this ratio at less than 25%.
A longer credit history will increase your credit score. Credit history only makes up 15% of your credit score. If you are just starting out, credit history should only have a marginal effect on your score. Try to keep your outstanding debt to a minimum and have a perfect payment history.
The financial industry frowns upon opening several new credit accounts, so don’t do it. Limit yourself to one or two credit cards and possibly an auto loan.
Identity Theft|A Financial Curve
Your financial life becomes complicated when your personal information gets tinkered with. If your identity is stolen your credit score will be damaged, and that gets expensive.
Even though you work hard, find extra money to invest and are on track to retire early, if your credit score gets damage due to identity theft, you could throw your entire financial cycle off kilter. Identity theft could take years to clear up, in the meantime, your credit score is in question, costing you investment money.
Be Preventative Not Reactive
Take matters into your own hands. Take preventative measures to help guard your identity. Monitor your credit reports regularly. You are entitled to a free credit report once a year from each of the 3 national credit reporting agencies. Take advantage of that offer.
Errors do occur, it’s up to you to correct those errors. The national credit reporting agencies are just responsible for reporting what they receive, they are not responsible for correcting mistakes.
Watch for scams, if it sounds too good to be true, it probably is. If you think you have been scammed, do a credit freeze.
You deserve to retire early and you can do it by making the one financial move that is just as important as all the rest, maintain a high credit score.