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How much does bad credit cost me?
The costs associated with poor credit are difficult to calculate, but utterly astonishing once revealed. By only modestly improving your credit scoreA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk., you can easily realize thousands of dollars of savings in interest payments alone. A poor credit scoreA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk. can easily cost you thousands of dollars when making a major purchaseA purchase for a substantial amount of money such as a refrigerator, car or home. such as a car, a home or even insurance. For real-world situations, see the following examples:
As your credit scoresA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk. rise you will qualify for lower interest ratesThe percent, per unit of time, of the total sum borrowed that is charged by a bank or financial institution for the use of their money. resulting in lower payments. Simply stated: "Raise Your Credit Score, Lower Your Monthly Payments."
On a $150,000.00 loan for a 30 year mortgageA written agreement to repay a loan. with a fixed interest rateThe percent, per unit of time, of the total sum borrowed that is charged by a bank or financial institution for the use of their money. this chart shows you what you can expect to pay depending on your credit scoresA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk..
| Your Credit Score | Interest Rate | Monthly Payment | Total InterestSum of all interest paid. In the case of a mortgage this total interest amount assumes that there are no prepayments of principal. Paid Over 30 Years |
|---|---|---|---|
| 720-850 | 5.57% | $858.00 | $158,880.00 |
| 700-719 | 5.69% | $870.00 | $163,200.00 |
| 675-699 | 6.23% | $922.00 | $181,920.00 |
| 620-674 | 7.38% | $1,037.00 | $223,320.00 |
| 560-619 | 8.53% | $1,157.00 | $266,520.00 |
| 500-559 | 9.29% | $1,238.00 | $295,680.00 |
Based on your credit scoreA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk. alone, your monthly payment can fluctuate 30%! The total interestSum of all interest paid. In the case of a mortgage this total interest amount assumes that there are no prepayments of principal. paid throughout the termThe length of time you have to pay back a loan. of the loan can be 50% more for people with lower credit scoresA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk.. In this illustration the borrower with the credit scoreA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk. ranging between 500-559 will pay $130,000.00 more in interest than the borrower in the 720-850 range over the same 30-year termThe length of time you have to pay back a loan.. Being the victim of an inaccurate/negative credit scoreA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk. is very costly. Repair your credit reportA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file. today and start saving money now.
Financing an Automobile
With a typical auto loan, imperfect credit can cost you anywhere from $4,500 to $8,500 over the course of the loan:
| Credit status | Rate | Payment | Cost of bad credit |
|---|---|---|---|
| Good | 10% | $424.94 | $0.00 |
| Average | 14% | $465.37 | $4,722.54 |
| Bad | 20% | $529.88 | $8,593.30 |
Home Mortgage
While losing $5,000 may sound painful, it is even worse when comparing buying a home to financing a vehicle. A poor credit scoreA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk. may cost $50,000 - $130,000 for a house that costs $100,000 (a relative rarity in most cities today):
| Credit status | Rate | Payment | Cost of bad credit |
|---|---|---|---|
| Good | 7% | $655.30 | $0.00 |
| Average | 9% | $804.62 | $50,155.24 |
| Bad | 12% | $1,028.61 | $130,791.63 |
Does good credit help me eliminate or pay off my debts?
Absolutely! If you have a $500 balance and only make the minimum monthly payment ($10 on most credit cardsA plastic payment card which allows the owner to obtain goods and services without the requirement to pay cash and on credit terms.), the interest rateThe percent, per unit of time, of the total sum borrowed that is charged by a bank or financial institution for the use of their money. has a huge impact:
| Interest rate | 16% | 19% | 21% | 23% |
|---|---|---|---|---|
| Number of months to be rid of debtA specified sum of money that is legally owed from one to another. | 83 | 94 | 120 | 168 |
| The interest you will pay over time | $329.42 | $431.08 | $698.50 | $1,174.36 |
(Source: Bankrate.com)
The costs associated with poor credit are difficult to calculate, but utterly astonishing once revealed. By only modestly improving your credit scoreA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk., you can easily realize thousands of dollars of savings in interest payments alone. A poor credit scoreA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk. can easily cost you thousands of dollars when making a major purchaseA purchase for a substantial amount of money such as a refrigerator, car or home. such as a car, a home or even insurance.
O.K., I see the value of good credit, but why should I consider Credit Report Repair?
There is only one way to improve your credit scoreA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk. quickly: credit reportA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file. repair. Adding new positive accounts to your credit reportA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file. takes a very long time. In contrast, taking inaccurate and erroneous items off of your credit reportA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file. can have an immediate impact on your credit scoreA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk.. Therefore, for those consumers who do not have the luxury of time, credit reportA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file. repair is usually the best option.
If you want to refinance or buy a house,
your past credit accountsAny loan or debt listed on your credit report is considered a credit account. determine if you would be a good risk for the mortgageA written agreement to repay a loan. company's money. If you have several accounts with negative account history such as collection accounts, charge-offsAction of transferring accounts deemed uncollectible to a category such as "bad debt" or "loss." Such accounts will usually continue to be pursued by collectors, but are no longer considered part of a company's receivable or profit picture because they are unlikely to be repaid in full., accounts included in bankruptcy or late paymentsA delinquent payment; a failure to deliver a loan or debt payment on or before the time agreed. (30, 60, 90 or 120 days late) this may indicate to the lenderA person or company that offers to lend money to a borrower for a given period of time. that your risk levelIn determining credit scores, lenders place you in a risk category that compares you to a large number of consumers with similar credit histories. is too high for them to issue you a loan. The most important factor to a potential lenderA person or company that offers to lend money to a borrower for a given period of time. is whether you will pay them back. If you have your credit reportA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file. in order, it will be much more attractive to potential lendersA person or company that offers to lend money to a borrower for a given period of time., since you will be viewed as a safe investment.
If you want to buy a new car,
expect the best interest ratesThe percent, per unit of time, of the total sum borrowed that is charged by a bank or financial institution for the use of their money. to go to people with the best credit ratings. If you want the advertised "0%" financing or "cash-back" offers from dealers, you must have your credit reportA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file. in order. AmericasCreditDoctor.com has programs and information that will get you into the automobile you want or need.
If you want to lower your mortgage payment
to save the money other people are saving, you need to start repairing your credit reportA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file. now. Your house can be paid off sooner and your monthly payments can be dramatically decreased. America'sCreditDoctor.com can help you remove inaccurate or obsolete items from your credit reportA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file., lowering your risk status and causing the mortgageA written agreement to repay a loan. companies to reevaluate your status. Once your risk status is as low as possible, and your credit scoreA credit score is a number that reflects your credit risk level, as determined by the credit reporting agency, typically with a higher number indicating lower risk. is as high as possible, you can renegotiate (refinance) a new interest rateThe percent, per unit of time, of the total sum borrowed that is charged by a bank or financial institution for the use of their money. on your mortgageA written agreement to repay a loan. that will save you thousands or even hundreds of thousands of dollars over the life of your loan.
If you want to lower your insurance rate,
your credit reportA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file. is a deciding factor in what your insurance rates will be. Insurance companies have determined that paying your bills on time means you might be more responsible. They want people who will pay them on time so they avoid the costly hassle of canceling policies. Good credit will affect the amount, quality, and cost of coverage you receive. That is another great reason to use the services of America's Credit Doctor.com.
If you want to rent a place to live,
be aware that many rental agencies and landlords access your credit reportsA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file. to determine if you pay your bills on time. They will also make judgments about your character in relation to your credit historyA record of how a person has borrowed and repaid debts.. America's Credit Doctor.com has programs that will repair your credit and get you into the home or apartment you want.
If you want to recover from Identity Theft,
the first thing to do is contact the authorities. Then, you need to call us. Having someone posing as you and using your information is a nightmare no one wants to deal with. Add to this the damage it causes to your credit historyA record of how a person has borrowed and repaid debts. and identity theftA form of fraud in which a consumer's financial information is illegally acquired for the purpose of making unauthorized purchases and transactions with their credit cards, or with funds from their checking or savings accounts. has truly destroyed lives. America's Credit Doctor.com can help you pick up the pieces and repair the harm that has been done to your credit reportA report containing information about a consumer's identity, credit relationships, some court actions, consumers statements and previous inquiries into that file..