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Even Wealthy People Can Have Bad Credit

While it is not all that difficult to imagine lower income people with low credit scores that is not always the case. There are plenty of people who don’t make a lot of money who happen to have good credit scores. In a like manner, you might not think that wealthy people would have any worries when it comes to their credit ratings. It turns out, though, that this is not true. There are plenty of very wealthy people in this country who have issues with their credit scores. It is at the point right now where even the rich need to be concerned about their credit scores, just like everybody else.

The recent economic problems that have taken place all around the world have put a lot of emphasis on credit scores, which, when they are on the lower end of the spectrum can limit a person’s access to obtaining loans, getting decent insurance rates and even getting hired for a new position. Many wealthy folks have actually hurt their credit scores without being aware of it. By making late payments, charging too much on credit cards and not using credit enough because of their higher income levels.

The bottom line is that being wealthy does not always mean that someone is necessarily wise when it comes to credit. Contrary to popular belief, a person’s savings and income don’t factor into their credit scores.

A financial advisor named Jeremy Portnoff said, Regardless of their finances, age, gender or ethnicity, people don’t have an understanding of how credit works. They should be aware of their scores, especially in this environment.” Mr. Portnoff went on to describe a client of his, who had more than a million dollars in assets, but still had a poor credit score. This person avoided borrowing money, rented his house and never used credit cards. These factors all worked together to create a sub par credit score and may hinder the person from getting a mortgage in the near future. Like many other people, this guy grew up with the belief that all credit was negative.

The credit crisis has made people of all economic classes more susceptible to lower credit scores. Everybody needs to have a good to excellent credit score to receive loans and to ultimately keep borrowing costs down for the entire country. Scott A. Beaudin, a financial advisor explained it like this, “We think the limit is at least 760 to qualify for the best rates.” Some people just don’t know how to build their credit scores, and many more don’t know how to keep their credit scores high over the long run. This is true for people who are rich just as it is true for middle and lower income households.

When the time comes to get a mortgage or to buy insurance, lower credit scores can be extremely harmful to wealthy people. If you have more assets, you have more of a need to insure them. But if your credit score is not up to snuff, the insurance companies will rake you over the coals when it comes to insurance premiums. No matter how much money you make, it is never a good thing to pay more for insuring your property than you ought to.

Credit scores generally range from about 300 points to 850 points. The sad fact of the matter is that most people don’t even have a clue about what their credit scores are until they apply for a loan. There is no excuse to be out of the loop when it comes to your credit score, as everyone is entitled to obtaining at least one free copy a year according to federal law.

What Wage Can You Actually Live On?

There seem to be less and less high paying jobs available these days. This means that people are having to settle for a smaller wage in order to have a job. There are jobs out there that pay more than minimum wage, but can you still live on them?

Many people are having to take jobs that only pay $8 to $9 an hour. Is this enough? Many people who are making these wages are finding that they may have to make some sacrifices to get by.

There are employers who pay these wages and offer benefits such as medical, dental, and vision insurance. If you are only making $8 or $9 an hour can you afford to pay for these benefits? Some people feel that they need to despite the fact that it will make their check smaller because they do not want to end up sick and not have insurance to help cover some of the costs of seeing a doctor and paying for medicine.

English: Minimum wage map Category:Minimum wag...
English: Minimum wage map Category:Minimum wage maps (Photo credit: Wikipedia)

There are others that feel they do not want these benefits because they need that money to pay bills. Not having medical insurance leaves the person with two choices in the event that they get sick. The first is that they can pay full price to see their doctor and get their medicine. This is not the best move however, the amount the full cost of seeing a doctor and getting medicine is so high that you would be better off getting the insurance.

There is one more option for those who do not want to get insurance. Many cities have free clinics. They can go and see a doctor and get medicine, provided they have no insurance, for free. There is also a downside of this too though. Most free clinics are regularly busy and you must wait quite a while in a waiting room filled with other sick people, to wait for their turn to see a doctor.

Some people have pets, and they contemplate whether or not they should get insurance for their pet. If the pet has an emergency the insurance will help pay for whatever care the pet needs. If the person does not pet insurance and an emergency happens, the may feel as though they cannot take their pet in. One thing to keep in mind however is that there are veterinary clinics out there that do make payment plans with their clients.

People who make a small wage have to make difficult decisions everyday about whether or not they can afford something. Some people may be able to make it on these lower wages, while others have much more difficulty. It all comes down to an individual person, can they or can they not afford to live on a lower wage. One tip would be to sit down and make a budget and stick to it as strictly as possible.