Easy Money Show

On past podcasts, I have talked about slow, steady ways of improving your credit score like paying down bills and paying them on time. And I’ve talked about fast, flashy ways of improving your credit score, like becoming an authorized user on somebody else’s healthy account or asking creditors to delete single sins that are dragging your score down.

Now I want to talk about why you should go to the trouble to take those steps to raise your credit score if it’s not tip top. By tip top I mean 720 or above on a scale of 300 to 850. 720 is the base threshold for obtaining the very good interest rates on loans, whether for credit cards, car notes, mortgages or other loans. 740 or 760 get you even better deals. But let’s use 720 as our goal here.

Suppose you started out with a credit score of 620, which is about the lowest score you can have and still get a private mortgage with no government assistance. I did some research and a typical interest rate for somebody with a score of 620 might be about 6 and a half percent. BUT if you raise that score up to 720, you would qualify for a mortgage rate of just over 5%. About a point and a half less.

Now let me do a math comparison for you on a $300-thousand dollar mortgage. With the roughly 6 and a half percent interest rate you’d get with your 620 credit score, interest on your mortgage will cost you about $23,000 a year. If you raise your score to 720 and lower your interest rate to 5%, then your loan will cost about $20,000 a year in interest. So just by staking steps to raise your score, you will save $3,000 a year and nearly a hundred thousand dollars if you kept the mortgage for 30 years.

I did some math for an auto loan too, and I won’t go into all of the exact interest rates and prices here, but a score of 720 instead of 620 could save you nearly $3,000 over the course of a 3-year auto loan.

Here’s my favorite part about raising and then maintaining a high credit score: it’s free. All you have to do is use your current credit responsibly and you will save thousands of dollars on your future credit.

Yes, I said “grocery auctions.” Weird but real. At a grocery auction, You’ve got the same fast-talking auctioneer, but he’s hawking apples instead of antiques. Amazing! I once attended a grocery auction in New Haven, Indiana for a Good Morning America story. My boss was a former food producer, so we did a LOT of food-related consumer stories at GMA. There were about 500 people at the Indiana auction, a lot considering they were all there through word-of-mouth. Participants told me they went for the energetic social atmosphere of the auction and stayed for the savings. One guy said he was routinely able to buy $450 worth of groceries for just $150.
A grocery auction works just like a regular auction, with one key difference. Since there’s more than one of each product; everyone who wants an item walks away with it in hand. The auctioneer gets people bidding on an item, say frozen French fries. Once the price will go no higher, that’s the price everybody who wants that product pays.
Most food auctions offer hundreds of different foods and household supplies. Some are surplus goods, like you’d get at a discount store such as MacFrugal’s or Big Lots. There are also a lot of dinged and damaged packages, with perfectly good products inside. You will also see items close to their expiration dates.
Now, bidder beware! In the excitement of an auction atmosphere, it’s easy to overpay, so it’s essential that you know what your favorite foods normally cost so you’ll know whether you’re really bagging a bargain. I put the Indiana auction’s prices to the test by comparing them with prices at a nearby grocery store. I picked a random cross section of half a dozen products and found the savings was 66 percent! Two thirds off AND free people watching and entertainment!
To find a grocery auction near you, just google “grocery auction near me. I did that myself before I came into the studio and came up a variety of choices near DC, where I live. You can also check out the website of the National Auctioneers Association: Auctioneers.org. The site has a tool where you can search for auctions and auctioneers by zip code.

LINK: To find grocery auctions: www.Auctioneers.org.