Having a low credit score hurts your bank account in more ways than you might have known.
National Credit Care did a study and discovered that people with low credit scores paid on average $200 more per month for auto financing than those with top tier credit.
Let’s look at how much more your car costs based on the financing terms:
$200 per month x 60 months = $12,000 more for the car
$200 per month x 36 months = $7,200 more for the car
How does that make you feel to pay $12,000 more than the last customer, all because of that three-digit score called FICO score or credit score?
What could you do with that extra $7,000 to $12,000 if you weren’t shelling it out in interest to the wealthy finance company?
But that’s not all!
On top of paying more in financing, you also pay a higher insurance premium for having a low score — even if you have a perfect driving record.
That’s right! Insurance companies also check credit scores as part of their determination on how much to charge you for insurance.
And don’t get me started on credit card interest rates…! I’ll save that for another article.
Take control of your credit! Review and repair. Even if you can’t fix everything, you can raise your score and keep more of your hard-earned money in your own pocket.
I don’t know about you, but I can think of a lot things to do with $7,200 to $12,000! Grab yourself a copy of Repair Your Credit Like the Pros here and get started today.
Available in paperback and on Kindle here.
If you know someone who is thinking of buying an automobile, please pass on this information to them, because no one needs to throw away good money on higher interest rates.
2 thoughts on “Need a New Car? How Much Will Having a Low Credit Score Cost You?”
Hi Carolyn, Do you have any suggestion/thoughts about what to do if Credit Bureaus have your email address (and are replying to my U.S. postal mail to them via email). I haven’t opened any of their emails. I have both of your books. I really appreciate what you’re doing.Thanks so much. Betty Omron
I’m sorry to hear that. Some mistakes are impossible to undo. They’re using email to save postage and you must have already agreed to accept email and waive certain rights when you initially signed up online. Therefore, I see no harm in reading their emails. Hopefully, they are bringing good news. If not, you might want to call if a phone number is provided, or you can continue to request an investigation for erroneous information by mail. Don’t despair, because the Fair and Accurate Credit Reporting Act still applies, no matter what. And, per law, your credit report is supposed to be 100% accurate. Good luck and best wishes!