Jul 28, 2011
Lower FICO, higher costs
28 Jul 2011
Posted by Andrew Kantor
You know that the worse your credit, the more you’re gonna pay for a loan. But how much more? The Washington Post decided to find out. It got rates for borrowers with different credit scores, then did the math, and put it in a fancy little interactive chart.
What’d the paper find?
One example: Buying a $200,000 home with 5% down, someone with a high FICO score (850) will pay only 4.271% interest — that’s a total cost of $331,850.
But the guy with the low FICO — say, 620 or 630? He’ll pay more than 5.8% interest and $383,521. That’s 50 grand more.
Check your credit score (free once a year) at the Federal Trade Commission’s approved site: annualcreditreport.com. That’s the only place to send your clients — tell them to avoid any company that advertises on late-night television.