Worried about your credit score’s impact on the financial side of your life? If it’s low, you should be.
For instance, the long-term cost difference between a 30-year mortgage loan with a 725 FICO credit score and a 625 FICO credit core adds up to over $20,000 (assuming a mortgage rate of 3.625% versus 4.125% over 30 years, which translates into a monthly payment of $912 for the higher score and $969 for the lower score, multiplied by 360 months.)
A lower interest payment is just one great reason why you should always be working to improve your credit score. “Because credit scores are so closely tied to interest rates offered to borrowers, a credit score difference of even 50 points can mean substantial financial savings for large financial transactions like buying a home, financing a car or consolidating debt,” says Doug Lebda, founder and CEO of LendingTree, which recently published a study calling San Francisco the “top credit score” city in the U.S. “Knowing and managing your credit score is especially important in this volatile interest rate environment,” he says.
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