Our lives revolve around credit and FICO scores but sadly some people never realize it until it is too late. The chart below shows how much more someone with a lower credit score would pay over the term of a 30-year conventional mortgage loan for $200,000.
| 720-850 | 4.75% | $0.00 |
| 700-719 | 5.125% | $16,668.00 |
| 640-699 | 5.67% | $41,392.80 |
| 600-639 | 6.5% | $79,506.00 |
Your credit score is calculated based on credit-related information contained in your credit file. This information is analyzed in five different ways to produce a three-digit FICO score.
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Payment History:
35% of your score is based on paying your credit related accounts. Late payments and other negative marks drop your score quickly. -
Credit Utilization:
30% of your score is based on how much credit you have and how are you using it. If you are close to utilizing the maximum amount of credit limit provided you, this can reflect negatively on your score. -
Length of Credit History:
15% of your score is based on good payment history over a period of time. -
New Credit Inquiries:
10% of your score is based on the number of inquires coming from creditors. -
Types of Credit:
10% of your score is based on having different types of credit accounts such as home mortgage, vehicle, credit cards, etc.
The Fair Credit Reporting Act
Fair Debt Collection Practices
