Good Vs. Bad Credit
You can qualify to have your dream home and/or a new car, at a decent rate.
There is a price to pay for having less than perfect credit and that price is reflected in higher down payments and interest rates.
COST OF BAD CREDIT
Example: Car $20,000/5-Year Term
| Credit | Interest | Payments | Total |
| Bad | 15% | $475.80 | $28,548 |
| Good | 5% | $376.60 | $22,656 |
| Penalty | 10% | $99.20 | $5,892 |
Example: House $125,000/30-Year Term
| Credit | Interest | Payments | Total |
| Bad | 10% | $1,097 | $395,100 |
| Good | 6% | $750 | $270,000 |
| Penalty | 4% | $347 | $125,100 |
As you can see, the savings are substantial. The money you save by having good credit and lower interest rates is more than the original price of the loan! Bad credit will generally require an average of 20% down versus 5% or even zero down.
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Jerry and Linda found their dream home for $120,000 and want a
30-year fixed rate. Their credit rating will determine what their
monthly payment will be. Which payment would you prefer?
| Good Credit | Bad Credit | |
| Score | 700-759 | 500-579 |
| APR | 6.456% | 10.313% |
| Payment | $755.00 | $1081.00 |
Difference of $326.00 per month or $3,912.00 per year or $117,360 over the 30 year loan.
Amy and Carl need a new car. You can see how they will save money if they can increase their credit score.
Which payment would you prefer?
| Good Credit | Bad Credit | |
| Score | 720-850 | 500-589 |
|---|---|---|
| APR | 7.221% | 14.937% |
| Payment | $497.63 | $593.83 |
Difference of $96.20 per month or $1,154.40 per year or $5,772.00 over the 5 year car loan.
Automobile Financing:
An auto loan can cost thousands more in interest if you are buying the vehicle with less than perfect credit.
$20,000 auto paid over 5 years:
| Credit | Rate | Payment | Cost Of Bad Credit |
|---|---|---|---|
| Perfect | 0-5% | $377.42 | $0.00 |
| Good | 10% | $424.94 | $2,851.20 |
| Fair | 14% | $65.37 | $4,22.54 |
| Bad | 20% | $529.88 | $8,593.30 |
WE CAN AND WILL HELP YOU:
Are you tired of the creditors and collection agencies harassing you?
Are you paying more in interest rate that you should?
Are you embarrassed by being turned down for automobiles, department store cards, gas cards, ANYTHING?!
Your credit affects more than you think. These are just a few aspects of your financial life that are affected by your credit:
Employment Opportunities:
Employers in today’s market investigate your dependability along with your track record of responsibility based off of your credit. Employers look to see how you manage your personal finances and see whether they can entrust their finances with you as an employee.
Renting Instead of Owning:
The “American dream” is to own a home, but more importantly than having something to call your own is the financial repercussion of renting instead of owning an appreciating asset. The money that you are spending each year in rent could be going into your pocket instead of your landlords.
Interest Rates on Mortgages:
A typical home mortgage can cost hundreds of thousands more in interest if you are buying a home with less than perfect credit.
Credit Help USA