I am often asked the question; What does bad credit cost me?
It is a hard question to answer because of the individuals circumstances and the fact that lenders are competing fiercely for customers.
But I will give it my best shot.
Mortgages
If you know your credit score you will be in a position to make a pretty good guess at what interest you will be charged on a mortgage. In todays (March 2006) market, mortgage rates for those in the top or prime category, with a score above 720, will pay around 6.25%.
As your score declines your rates will increase.
For those in the second tier, with a score between 700 and 720, rates will go up to around 6.38%; for those in the third tier, with a score between 675 and 699, rates will be about 6.91%; for those in the fourth tier, with a score of 620-674, rates will be about 8%; in the fifth tier, with scores in the area of 560 to 619, the rates increase to 9%; finally for those with the lowest scores, 500 to 559, the rate jumps to 9.82%.
On a $150,000 mortgage, your payments will be between $926 and $1411, a $485 difference per month.
Additionally, those in the lowest tiers will face...
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