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Follow our 200K journey to get out of debt! We share our best money tips to get out of debt and build wealth.

Saturday, October 31, 2009

Why Do I have to Pay More Interest Just Because I am in Debt? Step #6

When I began putting my financial life back in order part of that descision included buying a home. I had given up my house to my ex-wife in my divorce and having to rent an apartment just killed. For me owning a home is much better than renting.

Although, my debt debt was bursting at the seems at $60,000 I was still maintaining a credit score of 680. I bought my self a small condo that was actually cheaper than the rent on my apartment. This had happened before the crazy loans that came out, but I was so releaved to be able to qualify for a normal conventional loan. But with today's strict loan requirements it may not be as easy.

Step #6

If have accumulated an excessive amount of debt you can very likely be denied a loan. Or you could be paying a higher interest rate. The deciding factor is you credit score. Your credit worthiness is based on your payment history, income, potential debt, and the number of years you have been employed. The best score is 850 and the lowest score you can have is 300. There are many ways you can obtain your credit score. When I first pulled my credit score for the first time I used myfico.com. It was easy to use and they give a detailed explanation of each item on credit report. There is small fee, but it's worth it if you are a novice at credit reports.

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