So You Missed a Few Payments—What’s the Big Deal?
Does a Bad Credit Score Really Cost You Thousands of Dollars Each Year?
Many people believe that having a low credit score isn’t a major issue, but do we truly understand its impact on our finances? Because we don’t always see the direct cost associated with a lower credit score, it may seem like it has little effect. However, the reality is that a poor credit score can cost you thousands of dollars every year.
Did you know that in some states insurance companies can factor credit scores into their pricing calculations? If you have a low credit score, you could be paying a higher premium than an identical driver with excellent credit. Renting an apartment may also be more expensive, as landlords use credit scores to assess how likely a tenant is to pay rent on time. Given the choice between two applicants, a landlord may favor the one with the higher credit score, making it harder for those with lower scores to secure housing. That same logic applies to your auto and home loans, and really any type of loan.
This OneMain Financial article outlines two examples of loan quotes for individuals with excellent credit versus poor credit. The difference in mortgage interest rates was just 2.5%—which might not seem like much at first. However, over time, that seemingly small gap resulted in the borrower with poor credit paying over $44,000 more for the same house. Similarly, the same car cost them an additional $4,000 simply due to their credit score.
That’s a significant financial difference!
Whether you’re looking for affordable rent, lower insurance premiums, a personal loan, or a loan to buy a home, improving your credit score is a worthwhile and achievable goal.
Your credit score matters.
Click here to learn more about what a credit score is, how it is calculated, and how to achieve a better credit score.
Click here to watch a short video on tips to maintain your credit score.
Below is a bonus video that is not credit score specific but is still a great video on getting your finances in order in 2025.
How To Get Your Financial Life Together in 2025
No matter what your situation is, you can change it!
Remember, you’ve got this.