You could save a considerable amount of money just by bumping up your credit score. If you sit in the range of having a fair credit score, upping your credit to a very good range could have you saving thousands on your mortgage over the course of paying it off. Many borrowers across the United States with their scores between 580 and 669 are responsible for paying higher interest rates on their mortgage and on a variety of other financial products. Changing your credit score to a range that sits between 740 to 799 could leave you paying thousands less over time.
The largest discrepancy in payments comes down to large loans like mortgages. Borrowers that had a very good credit score would pay an average of $219,660 in interest over time on their mortgages whereas borrowers that had a fair credit score were paying an average of $261,076 at the same financial institutions.
On financial products like student loans, borrowers that were assessed with their credit scores were paying an average of $8640 in interest whereas debtors that had good credit scores were paying just $3933.
If you carry considerable credit card debt it’s also important to consider that with a good credit score you’ll end up paying half the amount of interest. Most types of credit cards and personal loans offer extremely critical rates on people who are considered a fair risk factor rather than people that are considered to be in a good credit standing.
If you’re in a position where it might take you several months or even several years to bridge the gap and get to a place where you are labeled as having a good credit score, it’s well worth the effort. Making the jump from just fair credit to good credit will take extra stress off of your life and help you net the ongoing interest for your future.
This post was written by Kristian D’An, owner of Lux Credit LLC and CCA board certified credit repair specialist. Lux Credit offers credit repair services for those looking to improve their credit!