Having a low credit score can have far-reaching financial consequences beyond just higher interest rates on loans. A recent investigation by LendingTree reveals that individuals with a "Fair" credit score can pay an extra $39,000 over their lifetime due to increased interest payments compared to those with a "Very Good" credit score. This significant disparity highlights the importance of maintaining a healthy credit score, as it not only affects loan rates but also impacts insurance costs and job opportunities. The study suggests that the total financial burden of a low credit score could equate to nearly a full year’s salary for some consumers. However, there is hope: simple steps like reducing credit card balances and ensuring timely payments can lead to substantial improvements in credit scores. Even a modest increase can save thousands in interest payments, particularly on mortgages, where better credit can lead to tens of thousands in savings over the loan's life.
Read the full article here.