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Does My Credit Score Matter?

Short answer:

Most of the time, no. But it can make a big difference when it does.

Long answer:

Your credit score doesn’t always matter, but it does when you’re trying to take out a loan or apply for other types of credit (credit card, line of credit, etc.). Having a higher credit score can mean a lower interest rate, which lowers the overall price you’re going to pay for what you’re buying.

Here are a couple of examples of why the interest rates you pay matter:

Let’s say you want to buy a new car that’s going to cost you $30,000, but you only have $5,000 that you can put toward the purchase, so you’re going to get a 72-month (6-year) loan for $25,000. Below is a table showing the impact of different interest rates.


Monthly Payment

Total Paid

Total Interest













The differences get even bigger when we’re looking at larger loans over a longer time frame - like a mortgage. Let’s say you’re buying your first house for $250,000, and you have $50,000 saved for a down payment. That means you’ll need a mortgage for the other $200,000, and you’re going to go with a 30-year fixed mortgage.


Monthly Payment

Total Paid

Total Interest













I don’t want to give the impression that your credit score is the only thing that impacts interest rates you pay on loans. It’s much more complex than that, taking into account your income, other debt, and current market conditions. However, with everything else held equal, having a better credit score can save you thousands of dollars if you’re going to be taking on significant debt.

Most credit cards provide your FICO credit score as a benefit of using their card, but you should also consider checking your credit report. You can get this for free annually from the three main credit bureaus: TransUnion, Experian, and Equifax. Kind of like your annual physical at the doctor, this is a good way to make sure nothing too crazy is going on.


As always, keep in mind that you don't have to go it alone. Check out my website to see what it's like to work with me and reach out if you have any questions.

If you found this post helpful, help spread the word! Share with friends and family that you think may benefit as well. But remember, this is solely for educational purposes - it's not advice.

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