Most people assume that having “fair” credit is good enough. After all, it’s not bad credit, right? But the truth is, fair credit can still cost you a lot of money over time. From higher interest rates to increased insurance premiums, not having a strong credit score can quietly drain your finances.
Higher Interest Rates on Loans and Credit Cards
Lenders see fair credit as a moderate risk, which means they’ll offer you higher interest rates on loans and credit cards. According to Experian, a fair credit score (typically 580-669) can lead to credit card APRs of 20% or more, compared to the lower rates available to those with good or excellent credit. This can add up to thousands of dollars in extra interest over time.
More Expensive Mortgage Rates
Buying a home? Even a small difference in your credit score can mean paying significantly more for your mortgage. A fair credit score could push your mortgage rate higher, increasing your monthly payment and the total interest you pay over the life of the loan. Bankrate explains that improving your score before applying for a mortgage can save you tens of thousands of dollars. Seeking mortgage assistance early can help you get the best possible terms.
Higher Insurance Premiums
Many insurance companies use credit-based insurance scores to determine your rates. A fair credit score can lead to higher premiums for auto and home insurance. The Zebra reports that drivers with fair credit may pay hundreds more per year compared to those with excellent credit. This is because insurers associate lower credit scores with a higher likelihood of filing claims.
What You Can Do About It
If your credit is in the fair range, you’re not stuck there forever. Working with a credit repair specialist can help you improve your score by identifying and addressing errors, reducing debt, and creating a strategy for healthier credit habits. Even small improvements can lead to big savings over time.
Don’t let fair credit cost you more than it should. Contact Royal Services Solutions today to explore your options for credit improvement and mortgage assistance. The sooner you take action, the more money you can save!