The Cost of BAD CREDIT!
Very few things in life can have a more devastating effect on your earnings and lifestyle than a poor credit score. A Low credit score can cost you hundreds or even thousands of dollars per month.
Credit Cards
Most prime credit cards are totally out of reach to consumers with bad credit. The few credit cards that are available to them ("sub-prime" cards) typically have exorbitant setup fees or recurring monthly fees, have very low credit lines, often require cash deposits, and in most cases do not report your positive credit activity to the credit bureaus.
Automobile Financing
Paying on a car? You are probably paying between $5,000 and $9,000 more just for having bad credit.
This added interest expense makes every monthly payment higher.
A $20,000 car paid over 5 years:
Credit Status |
Rate |
Payment |
Cost of Bad Credit |
| Perfect |
10% |
$424.94 |
$0.00 |
| Mildly Damaged |
14% |
$465.37 |
$4722.44 |
| Damaged |
20% |
$529.88 |
$8593.30 |
Now a Mortgage
Bad credit in auto financing can really hurt, but it is nothing compared to the cost of bad credit where 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:
