James here again, and I’d like to follow up on my previous post about your credit score. I explained in my last post the basics about your credit score, and now I’d like to discuss the ramifications of having a bad credit score. I can speak to this from personal experience having suffered from the consequences of bad credit for many years. Thankfully, I took the necessary corrective actions, and after much effort over 6 years, I brought my score back up above 700 where it remains today. This wasn’t easy, but I want to reassure any of you with bad credit that it is quite doable. So what were the results upon my life back when my score was in the toilet? I’ve actually analyzed this in great detail.
I calculated that I paid an additional $17,000 in interest as a consequence of my previous poor credit score. If I had been diligent in maintaining a good score and diverted this $17,000 into retirement accounts instead, that would have translated to almost $125,000 additional income during my retirement years. How many extra vacations or trips to see the grandkids will that be? I’ll never know, but I’m sure the banks were more than happy to collect the additional $17,000 and use it to pay big bonuses to their executives. Don’t be a sucker like I was — keep close track of your credit score and ensure you take all steps possible to protect it. Not only can you face increased interest payments like I did, but you can also find yourself being denied a needed mortgage or car loan. In the future I’ll be discussed more in depth this most important of issues relating to your overall financial health.