What Bad Credit Costs You

 

 

What Bad Credit Costs You
According to MyFICO, a division of Fair Isaac, a Consumer with a FICO score between 720 and 850 might get a 5.922% rate on a $200,000 30-year fixed mortgage rate. That would give him a payment of $1,189 a month and $228,072 in interest over the life of the loan.A consumer with a FICO score between 675 and 699 might get a 6.584% on the same loan, which would cost him $1,275 a month, with $259,074 in interest over the life of the loan, or $31,002 more.The consumer with a FICO score between 620 and 674 might get a 7.734% rate and pay $1,431 per month, costing him $315,021 in interest over the life of the loan. That’s $55,947 more than the middle-score borrower and $86,949 more than the borrower with excellent Credit.Worse yet, a consumer with a score between 560 and 619 might get an 8.531% rate, pay $1,542 per month and pay $355,200 in interest over the life of the loan. The difference in interest paid over the life of the loan between the first and last example is more than $127,000.See for yourself. Interest rates accurate as of February 26, 2008:

 

30 Year Fixed Mortgage

FICO® score

APR

Monthly Payment

760-850

5.822%

$1,764

700-759

6.044%

$1,807

660-699

6.328%

$1,862

620-659

7.138%

$2,024

580-619

9.205%

$2,458

500-579

10.195%

$2,676

 

36 Month Auto Loan

FICO® score

APR

Monthly Payment

760-850

6.367%

$765

700-759

7.280%

$775

660-699

8.807%

$793

620-659

10.587%

$814

590-619

13.950%

$854

500-589

15.124%

$868

Back to Credit Education

Share This