Credit scores affect the cost of living for all Americans, including Millionaires who rely on leverage to build wealth.
No one can afford to neglect their credit history – even the wealthiest investors. Credit scores affect borrowing costs for all Americans, including Millionaires who rely on leverage to build wealth.
Credit scores not only affect credit card rates and the terms of car loans, they also impact the ability of Millionaires to buy and sell stocks on margin. Many wealthy investors believe in the principle of leverage, borrowing someone else’s money to make money. Using leverage can become very expensive for investors with bad credit scores.
Millionaires commonly use leveraged real estate to build and consolidate wealth. Lenders factor in a consumer’s credit scores when setting the terms of a home mortgage. Favorable terms can mean big savings for Millionaires taking out jumbo mortgages to finance large homes, a mortgage for a second home or vacation property or financing for commercial real estate investments.
Learn more about the role real estate can play in building wealth.
Millionaires may enjoy a high net worth, but they can experience a loss or reduction in earned or investment income. A cash-strapped Millionaire may have difficulty obtaining credit if they have blemishes on their credit scores. Despite a high net worth, Millionaires with a poor credit history can be rejected or charged a very high interest rate.
Consumer advocates urge all Americans to routinely check their credit scores for mistakes and signs of identity theft.
According to the FTC, one-in-five credit scores contain mistakes.
David Silverstone is a veteran financial writer and credit enthusiast. He is a contributing columnist atCredit Card Insider, the leading provider of unbiased consumer and business credit card selection and discovery resources. You can find more of his work on The Insider Blog.