Cost Of Bad Credit

The cost of bad credit difference between a person with great credit and one with poor credit can be great opportunities. The cost of bad credit on your credit profile shows your integrity as a consumer and a borrower and determines your trustworthiness in the eyes of creditors. If you have good credit you are automatically eligible for better interest rates, loan programs, and loan amounts. The example below illustrates the differences in payments and interest rates for borrowers with various credit (FICO) scores on a $150,000, 30-year fixed mortgage:

FICO score Interest Rate Monthly Payment
720-800 6.23% $921.00
675-700 6.89% $987.00
620-674 8.04% $1105.00
560-619 8.53% $1157.00

As you can see, there is a significant difference in interest rates and monthly payments between a high FICO and low FICO score, and proof of the cost of bad credit. Clearly, poor credit can cost you a lot of money over time and limit your abilities to use your money in other ways. Many things in life are not planned and opportunities can come about when least expected. If presented with opportunities for a new job venture, to start a small business or partnership, or to invest in real estate-to name a few, people with great credit will be able to capitalize on these opportunities because of their strong, trustworthy credit profiles. Contact an Alerio Representative today and find out the cost of bad credit and how it is affecting you.