What Your FICO Score Costs You

Most people only consider their FICO score in terms of the ability to get a loan or home mortgage. However, your FICO score also determines the interest rate you will pay for that loan or mortgage.

Let's take a sample 30-year fixed rate $250,000 loan and look at the interest rate and monthly payments you will have to make, based on your FICO score.

Note: these Mortgage rates are as of August 12, 2008

That's an extra $800 a month just on this one credit item. You will no doubt also be paying more for your credit cards, your car loan, and even your utility deposit and car insurance.

Total that up to an annual amount and your FICO score can easily be costing you $10,000 - $20,000 A YEAR!!!

Total the over a lifetime and expect to pay an extra $500,000 - and that money could instead be in your retirement account.

It makes the cost of working with a credit repair agency to remove negatives that lower your FICO score seem miserly.

Once you raise your FICO score you you can renegotiate the rates on your mortgages, credit cards and other financial relationships. It's a simple straight forward three step process:

1. A better credit report WILL raise your credit score
2. A higher credit score will get you a lower interest rate
3. The lower your interest rate – the more money you will save.

In many instances, the credit scoring system is not fair, so ensuring your credit history record is correct, and optimizing your credit score is vital.

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Credit Management Index | FICO Score