How Much Money Is Bad Credit Costing You?

Having bad credit might be costing you more money than you think. Continue reading to find out how you might be throwing away thousands of dollars every year.

First, take a look to see what category your current FICO score falls into:

FICO Credit Score ChartNext, lets look at some charts to see how your credit score directly impacts the amount of money that you pay for interest on your auto loans, credit cards, and a mortgage.

How Bad Credit Affects Auto Loans

Lets take a look at the interest cost for an auto loan. For the below numbers, we are using a standard 60 month loan with a fixed rate and financing $20,000:

Credit Score Rate Payment Added Cost
Excellent 720-850 5% $377 $0
700-719 7% $396 $1,116
Moderate 675-699 9% $415 $2,265
620-674 12% $445 $4,048
Bad 560-619 18% $508 $7,827
500-559 20% $530 $9,148

How Bad Credit Affects Credit Cards

Now let’s take a look at how your credit score affects the interest rate with your credit cards. For the below numbers, we are using a balance of $5,000 with a fixed rate and a monthly payment of $200:

Credit Score Rate Balance Added Cost
Excellent 720-850 4% $5,000 $0
700-719 6% $5,000 $126
Moderate 675-699 8% $5,000 $259
620-674 10% $5,000 $401
Bad 560-619 15% $5,000 $803
500-559 21% $5,000 $1,404

How Bad Credit Affects Home Loans

Now let’s take a look at how your credit score affects the interest rate with a mortgage loan. For the below numbers, we are using a fixed rate 30 year loan with $200,000 being financed:

Credit Score Rate Payment Added Cost
Excellent 720-850 4.35% $996 $0
700-719 4.55% $1,019 $8,532
Moderate 675-699 4.75% $1,043 $17,162
620-674 4.95% $1,068 $25,890
Bad 560-619 5.35% $1,117 $43,633
500-559 5.95% $1,193 $70,941

As you can tell, the savings are quite substantial for auto loans, credit cards, and mortgages.

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