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Shelby Bennett/Interactive Credit

A credit score is a number generated by a mathematical formula that is meant to predict credit worthiness. The most common of the credit score standards is the FICO score created by Fair Isaac. The Fico score ranges from 350-850 and is intended as a predictor of whether or not you will be 90 days late on a loan obligation. Fair Isaac uses thousands of credit reports to calibrate the FICO scoring model and is very secretive of the exact formula.

The cost of bad credit
Keeping BAD CREDIT costs more than fixing BAD CREDIT

How much have you paid in additional fees due to your poor credit rating? One estimate is that a poor credit rating costs the average consumer $3000 per year or $50,000 in a lifetime due to extra charges that are assessed simply because of a low credit score. Unnecessary deposits, excessive interest, higher insurance rates, lower paying jobs are just a few of the financial hardships faced by those with problematic credit. This dollar figure does not include the extreme inconvenience, additional stress, low self-esteem, and loss of dignity associated with being considered a second-class citizen in a society that is based on credit worthiness. Put an end to your credit problems…if it costs MORE TO KEEP BAD CREDIT THAN TO RESTORE YOUR CREDIT STANDING. Why would you want to pay MORE to have so much LESS??

Cost of Bad Credit

Automobile Financing
If you are financing a car and have bad credit, you are probably paying thousands of dollars more than you would pay once you had restored your credit. This extra interest shows up every month in a dramatically higher payment. One of the first things that our members often do once they have restored their credit is to refinance their automobile for a fraction of their current payment or buy twice the car at nearly the same payment. Take a look!

$20,000.00 car paid over 5 years:

Credit Status	Rate	Payment	Cost of bad credit
Perfect	7%	$396.02	$0.00
Mildly Damaged	10%	$424.94	$1,735.25
Damaged	20%	$529.88	$8.031.60
Severely Damaged*	25%	$587.03	$12,460.39

Home Mortgage
The "American Dream" of owning your own home is out of reach for most people with credit problems. As you see below, even mildly damaged credit will cost a small fortune in additional interest. This forces credit challenged consumers to raise families in less desirable neighborhoods and to pay off someone else's mortgage for them leaving the credit challenged with only several years worth of rental receipts.

$100,000.00 home paid over 30 years:

Credit Status	Rate	Payment	Cost of bad credit
Perfect	7%	$655.30	$0.00
Mildly Damaged	9%	$804.62	$50,155.24
Damaged	12%	$1,028.61	$130,791.63
Severely Damaged*	Mortgage generally not available at any price