What is a good credit score? What’s not? How does a credit score range impact your life, and the rates you are able to receive on a car loan or mortgage?
In this post, let’s compare two imaginary people – let’s call them Jerry and Barry – to examine their credit profiles and see how their credit impacts auto loans, mortgages and credit card.
Meet Jerry: Credit Score 780
A few things about Jerry’s credit report
- Has 10 credit accounts
- Has 15 years of credit history
- No late payments
- No collections
- No major derogatory items
- Balance of 15% on credit card limits
Meet Barry: Credit Score 680
- Has 5 credit accounts
- Has 6 years of credit history
- (1) 30 day late payment from 1 year ago
- (1) 90 day late payment on another account from 2 years ago
- No collections
- No major derogatory items
- Balance of 45% on credit card limits
The differences between Jerry and Barry are minimal. Barry forgot to pay a couple bills a couple years ago and has a higher revolving balance on his credit cards when compared with his credit card limits. Meanwhile, Jerry has more credit accounts and lengthier credit history on top of a clean credit report.
Let’s see how these differences impact the costs Jerry and Barry have on a mortgage, car loan and credit card.
Credit Score Range On An Auto Loan: 680 score (Barry) vs 780 score (Jerry)
Both Barry and Jerry are looking at a brand new Ford F-150 truck. They are interested in obtaining a 36-month new auto loan with a Loan Amount of $25,000. The term of the loan (36 months) and Interest rates are fixed for the term of the loan. Let’s see how much a credit score range impacts the amount both Jerry and Barry will ultimately pay for the same car.
| Credit | Score | Rate | Payment | Added Cost |
| Excellent | 720-850 | 5.30% | $753 | $0 |
| 700-719 | 6.83% | $770 | $612 | |
| Moderate | 675-699 | 8.78% | $792 | $1,404 |
| 620-674 | 12.36% | $835 | $2,952 | |
| Bad | 560-559 | 18.20% | $906 | $5,508 |
| 500-559 | 19.23% | $919 | $5,976 |
Jerry (780 credit score)
As the chart above shows, Jerry and his 780 credit score is able to obtain a 5.30% interest rate for a $753 monthly payment.
Barry (680 credit score)
As the chart above shows, Barry and his 680 credit score is able to obtain a 8.78% interest rate for a $792 monthly payment. Not only will Barry pay $39 more per month (or a pack of diapers each month for his baby), but he will end up paying an extra $1,404 for the same car.
Credit Score Range On A Home Loan: 680 score (Barry) vs 780 score (Jerry)
Both Barry and Jerry are looking at buying a home in Scottsdale, Arizona. Their 30-year fixed jumbo home mortgage APR’s are estimated based on the following assumptions: FICO scores between 620 and 850 assume a Loan Amount of $300,000, 1.0 (0.0) Points, a Single Family – Owner Occupied Property Type and an 80% (60-80%) Loan-To-Value Ratio.
| Credit | Score | Rate | Payment | Added Cost |
| Excellent | 720-850 | 4.31% | $1,487 | $0 |
| 700-719 | 4.53% | $1,526 | $14,040 | |
| Moderate | 675-699 | 4.71% | $1,558 | $25,560 |
| 620-674 | 4.93% | $1,597 | $39,600 | |
| Bad | 560-559 | 5.36% | $1,676 | $68,040 |
| 500-559 | 5.90% | $1,780 | $105,480 |
Jerry (780 credit score)
As the chart above shows, Jerry and his 780 credit score is able to obtain a 4.31% interest rate for a $1,487 monthly payment on his mortgage.
Barry (680 credit score)
As the chart above shows, Barry and his 680 credit score is able to obtain a 4.71% interest rate for a $1,558 monthly payment. Not only will Barry pay $69 more per month (or two packs of diapers each month for his baby and the one on the way), but he will end up paying an extra $25,560 for the same house in Scottsdale.
Credit Score Range On Credit Cards: 680 score (Barry) vs 780 score (Jerry)
If a person with average credit (Barry) gets a credit card, chances are that the annual fees and interest rate are much higher than it would be for someone with good credit (Jerry). It can be hard for someone with bad or average credit to recover from having to pay such high fees on their credit card. Let’s see how much more Barry pays in interest than Jerry does on a $5,000 credit card balance.
| Card Type | Score | Rate | Balance | Added Cost |
| Platinum | 720-850 | 4% | $5,000 | $0 |
| 700-719 | 6% | $5,000 | $362 | |
| Gold | 675-699 | 8% | $5,000 | $774 |
| 620-674 | 10% | $5,000 | $1,250 | |
| Standard | 560-559 | 16% | $5,000 | $3,240 |
| 500-559 | 23% | $5,000 | $7,856 |
Jerry (780 credit score)
As the chart above shows, Jerry and his 780 credit score is able to obtain a 4% interest rate on his monthly credit card payments.
Barry (680 credit score)
As the chart above shows, Barry and his 680 credit score is able to obtain a 8% interest rate – double the interest rate of Jerry for an added cost of $774 on the same revolving balance.
As you can see, a credit score range has a big impact on a life.
Jerry and Barry have minimal differences in their lives (a couple of late payments and a stronger or weaker credit profile) with major differences in the price they pay for important things in their life.
If Barry calls Go Clean Credit, we can help him improve his credit score to get to the same place as Jerry. No matter what your situation, Go Clean Credit has a solution. We have many credit repair programs that are available to help you overcome your credit situation and place you back on the path to financial success. Real credit restoration is not a once size fits all model and we tailor your needs to the right program, but most people can start for just $99 per month.
We have fixed price programs that get you back on track in as little as 5 months, debt resolution solutions, programs geared toward people who have had recent short sales or foreclosures and many others. Help is just a free phone call away or you can fill out an appointment request. Contact Go Clean Credit to schedule a free consultation today.