A Significant Number
Your credit score is such a significant number that it affects many areas in your life. It may be a deciding factor in you getting the house of your dreams and helping you get the job of your dreams. Many employers now review your credit report as part of the hiring process. The higher your credit score, the lower the cost of your auto insurance.
So, your credit score is not only the key component to obtaining credit, but it also determines the terms for the type of credit you obtain. If you are high risk, your interest rate will be inflated. Let’s look at two different car buyers to get a better understanding of this point.
CONSUMER #1 Excellent credit score – 800
CONSUMER #2 Mediocre credit score – 630
If you are only comparing monthly payments, you may not think $48 a month is a huge difference, right?
However, take a look at how much more interest Consumer #2 pays over the life of the loan which is a whopping $2,850!
The difference between excellent credit and mediocre credit could literally save you thousands of dollars. If you have mediocre credit, you may still be able to purchase a vehicle at a higher price which protects the lender’s liability, but if you have excellent credit, you will pay much less for the same car.