How Much Is A Good Credit Score Really Worth?

More and more of your everyday expenses are becoming influenced by whether or not you have a good credit score. The deposits you pay to start services like cable, internet, telephone, or utilities are higher if you have bad credit (if you have to pay them. Frequently people with good credit don't have to). Your interest rates for mortgages, car loans, student loans, and credit cards (just to name a few) can be much higher as well, if you even qualify to begin with. Even your car insurance payments can be higher now if your credit score is low. How much is good credit really worth? You're about to find out...

How damaging is it if you don't have good credit, really? The answer may shock you:

You could, over the process of your life, lose hundreds of thousands or even millions of dollars if you don't have a good credit score.

Let's just use a simple payment like your car payment to show how this works. The interest rate on a car payment for someone with a good credit score can be very low, around 3% to 4% (as of this writing). On the other end of the example, people can pay upward of 18% or higher if they have bad credit or no credit at all.

For example, a $15,000 car loan at 4% for 4 years carries a $339 payment per month. The same car loan with a 15% interest rate is $417 a month. Just for having less than perfect credit, you're looking at an additional $78 a month

The real difference can be seen over time, however, with that $78 difference costing you $936 a year. Take it over 10 years, and it's $9,360 dollars. You literally lose the money to buy a nice used car every ten years just because of your credit.

Where the damage really comes in is over the long term. Were you to take that $78 payment over 40 years, covering all the vehicles you own from age 20 to 60, and now you're talking about a grand total of $37,440 dollars. Were the effects of compoounding interest from even a moderate investment added into the equation, and you are easily losing a couple hundred thousand dollars.

All of this over that little $78 payment. But what if we were talking about hundreds of dollars a month?

Currently, the interest rate on a 30year fixed mortgage can be as low as 4.5% for someone with good credit. Someone with bad credit: 9%. On a $150,000 loan that's a payment difference of $446 a month. Just the difference in payments alone without counting for the lost opportunity to invest over 40 years adds up to $214,080. That's a house or two, or a couple of college educations!!

The list goes on and on with credit cards, insurance payments, etc. You could quite easily be looking at a difference of $700-$800 a month just for having a good credit score. That adds up to hundreds of thousands or millions of dollars over your lifetime!

Your credit score is, however, something that you can learn to control. If you have some issues in your past, you can repair those through learning how to repair your credit on your own, or by seeking the assistance of reputable credit repair professionals. And, last but not least, credit protection is a smart move for anyone, especially those with good credit. Identity theft is the fastest rising crime in our society.

Take control of your credit score as fast as you can. It's worth a fortune to you and your family.

By: Benjamin Wehde

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