Help The Middle ClassNews and Information For The Heart Of America
Clean Up Your Credit and Save $100,000
What if I told you there’s a potential $100,000 smackaroos in it for you for just sticking with me for another three minutes?
Here’s how: Clean up your credit score.
Seriously, I’m not going to harp on about how stellar credit means paying less interest on loans, qualifying for lower insurance premiums, and sailing through things like landlord and employment background checks. You know that already.
Instead, I’m going to let cold hard cash do the talking.
The table below illustrates the difference between what someone with a good credit score (e.g. 720 and above using the FICO scoring system) and someone with poor credit (less than 620) pays over the course of 30 years on a $150,000 mortgage.
Every single month, the person with poor credit pays $278 more than the neighbor with better credit for the exact same mortgage. Month after month of being saddled with the higher interest rate adds up, and after 30 years the difference comes to a whopping $100,069.
The damage — and savings — runs even deeper
Now imagine how much more money you’re passing up by being passive about your credit score. Every car loan, credit card rate, and maybe even insurance premium is tied to your credit score.
Poor credit adds more than $6,500 to a 60-month, $25,000 car loan — that’s $100 a month more than the driver who cleaned up their credit before car shopping. Got a credit score that’s less than 550? Be prepared to shell out $600 more a year for your car and homeowners insurance than if your score was 750 or higher.
FOR CONTINUATION OF THIS STORY AT THE MOTLEY FOOL WEBSITE, CLICK THE FOLLOWING LINK: Clean Up Your Credit and Save $100,000.
