 How Much Does Bad Credit Cost?
SOME USEFUL FACTS
-- How much does bad credit cost? --
Credit Cards Most if not all prime credit cards are entirely out of reach to consumers with bad credit. And the few credit cards that are available to them (known as “sub-prime” cards) typically require exorbitant setup fees or recurring monthly fees, offer very low credit lines, often require cash deposits, and in most cases do not even report your positive credit activity to the credit bureaus.
Automobile Financing If you are making payments on a car, you are probably paying between $5,000 and $9,000 more just for having bad credit. This added interest shows up every month in a higher payment. Take a look.
$20,000 Vehicle Financed for 5 Years
Credit Status Rate Payment Cost of Bad Credit
High Credit Score 10% $424.94 $0.00
Slightly Damaged 14% $465.37 $4,722.54
Damaged 20% $529.88 $8,593.30
Home Mortgage Bad credit in auto financing can really hurt, but it is nothing compared to the cost of bad credit when a home is involved. A typical home can cost between $50,000 and $130,000 more in interest if you are buying the home with bad credit.
$100,000 home paid over 30 years:
Credit Status Rate Payment Cost of Bad Credit
High Credit Score 7% $655.30 $0.00
Slightly Damaged 9% $804.62 $50,155.24
Damaged 12% $1,028.61 $130,791.63
As you can see, a low score can cost you hundreds of dollars per month. Which is why it is so important to obtain and maintain as high a score as possible.
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