Maybe the best way to save money and build financial security is to improve your credit score.

You can save over 33% of the original amount of a mortgage loan if your credit score qualifies. It’s surprising how people who want to build financial freedom will continue to allow their credit scores to suffer, thus making the building of desired security exponentially harder.

The importance of a high credit score can be easily recognized in the low interest rates paid by qualified borrowers. The assumption is simple. If a person has a higher credit score, then they have proven that the risk associated with lending to them is lower. If the risk is lower, it results in access to greater amounts of funds and lower interest rates paid because the lender believes there will be less headache, expense and difficulty in collecting the debt.

For example; during the first quarter of 2009 on a $300,000 30-year loan, someone with a credit score of 760 to 850 could expect an interest rate of 5% with a monthly payment of $1,605. However, on the other end of the spectrum, someone with a credit score of 620 to 640 would expect an interest rate of 6.6% with a monthly payment of $1,914. The difference in the monthly payment would be $309 per month. That really ads up over time.

Over the 30 year period this would mean the person with the lower credit score would have to pay an additional $111,240 in interest. So is it worth your time and effort to maintain a high credit rating or correct a low one? Only if you’re interested in getting the most for your money, reducing expense and building a greater extent of financial security. And who isn’t? That extra $111,000 would go a long way toward building your retirement fund.

If for no better reason than to save money, you need to make sure your credit score is as high as possible. There are a number of things that can be done to improve it. And none of them are too difficult or time consuming. Take the time to learn your credit score and how to get it as high as possible. Watch for some additional articles on how to get a truly free credit report and how to take steps to change inaccuracies in order to push your score up to where it belongs.

As always, we’re happy to help if we can.