How can fixing bad credit save money?
All lenders rely on credit reports and scores to give them an idea of an individual’s risk level. If you have bad credit, you are considered a higher risk for default or non-payment and therefore you are charged higher rates. You may not realize how much difference this can make until you consider an example from My Fico. They report that the difference in a 30-year $150,000 mortgage for two individuals with credit scores of 550 and 720 can result in the person with the lower score paying an additional $165,000 over the term of the mortgage. Or to put it in other terms, the person with the lower score will pay $459 per month more for his mortgage.(My Fico) Ed Ojdana, president of Experian Consumer Direct says “The better the score, the lower the rate and that can save you a ton of money.” (Bankrate) And this applies not just to mortgages but to other purchases as well. Surveys have shown that consumers with bad credit can pay up to 60% more for a car loan. (Creditguard) In addition, on
