What Your Credit Score Can Save You

Credit scores aren’t normally thought of as something to make your heart beat faster, but the truth is that a good credit score is the same as getting as much as tens of thousands of dollars for free.

When you apply for a major loan such as for a car or a home, potential lenders will look at your credit score to see whether it is risky to lend to you or not. And if you have good credit (a score above 760), lenders will view you as a low-risk loan recipient who is likely to repay the loan. And since they don’t fear that you’ll default, they’ll be willing to charge you a lot less in interest than someone with a poor score. In fact, for the very lowest scores, lenders won’t even give a penny.

To see this money savings in action, move the slider to the left and right to see how much your mortgage, car loan or credit card interest would be, depending on your credit score.

What Your Credit Score Can Save You

Mortgage
Auto Loan
Credit Card APR*
600
800+
Below 620, loan applications are reviewed on a case-by-case basis and take into account
the applicant's equity, debt ratios, reserves, payment history and employment.
*Not including promotional 0% interest rate cards.

If you want to get a free credit score, check out Credit Karma, and for a free annual credit report, go to Annualcreditreport.com.

In order to maintain a good credit score, it’s important to make sure that you find erroneous charges early. For that reason, it’s a good idea to link your accounts link all your accounts in the My Money Center, so you can see all your transactions at a glance and monitor them regularly.

Posted in: ,

Recommended Tools

New Today

  • Martzy

    It would be nice if there were links here as to where we can get our credit score.

    • Anonymous

      Hi Marty,

      Good point. If you’d like to get yours, check out CreditKarma.com. You can also get your free credit report at Annualcreditreport.com.

      Let us know if you have any other questions!
      Laura

  • AP1

    we are told to never cancel old credit cards bc credit history is very important for your credit score.  however, i have one card that i’d love to cancel in order to simplify my life, i haven’t used in a very long time and therefore the credit limit is very low, all my other cards have high limits so i cant imagine this affecting my credit utilization ratio much. B/c of that, I think it would be ok to cancel, but im not 100% sure.  how much of a potential negative affect on my credit score could it have, and for how long would it take a hit?   

    • Anonymous

      Hi AP1,

      If you have a long credit history and at least a few other credit cards with substantially higher limits, closing one credit card with a very small credit limit should have little effect on your credit. However if this is a longstanding account (like one of the first cards you ever opened), it may impact the length of your credit history which is one of the factors when determining a credit score. Since you say you have a low credit limit on this card, that will probably not affect your credit score, but if it had a higher limit, then closing it would impact your credit utilization ratio. 

      Closing a card is not only convenient as far as household accounting is concerned but it also reduces your chances of identity theft and keeps you from racking up charges on that card! If you decide to close the card you can call the bank over the phone but be sure to also follow up with a letter for your records.

      Laura