Why Your Credit Score Matters
March 21, 2020
You can leverage great scores into great deals — on loans, credit cards, insurance premiums, apartments, and cell phone plans. Bad scores can hammer you into missing out or paying more.
The lifetime cost of higher interest rates from bad or mediocre credit can exceed six figures. For example, according to interest rates gathered by Informa Research Services:
- Someone with FICO scores in the 620 range would pay $65,000 more on a $200,000 mortgage than someone with FICOs over 760. (FICOs and VantageScores are on a 300-to-850 scale.)
- On a five-year, $30,000 auto loan, the borrower with lower scores would pay $5,100 more.
- A 15-year home equity loan of $50,000 would cost a low scorer of $22,500 more than someone with high scores.
Since credit scores have become such an integral part of our financial lives, it pays to keep track of yours and understand how your actions affect the numbers. You can build, defend and take advantage of great credit regardless of your age or income.