A 620 vs 760 Credit Score Costs You $48,000
The exact math on how your credit score translates to real dollars — and why improving it is the highest-ROI financial move you can make.
Your credit score isn't just a number. It's a price tag.
Every point affects the interest rate you pay on mortgages, car loans, and credit cards. Over time, those rate differences compound into tens of thousands of dollars.
Let's break down exactly what low credit costs — and what you stand to gain by improving it.
The Mortgage Math: $48,000 Over 30 Years
Mortgage lenders price loans based on risk tiers. Better scores get better rates. Here's real 2025 data for a $350,000 loan:
| FICO Score | APR | Monthly Payment | Total Interest (30 yr) |
|---|---|---|---|
| 760-850 | 7.24% | $2,385 | $508,000 |
| 700-759 | 7.45% | $2,431 | $525,000 |
| 680-699 | 7.56% | $2,455 | $534,000 |
| 660-679 | 7.61% | $2,467 | $538,000 |
| 640-659 | 7.71% | $2,490 | $546,000 |
| 620-639 | 7.84% | $2,518 | $556,000 |
The bottom line: $556,000 - $508,000 = $48,000 more in interest for the 620 borrower.
That's not over a lifetime. That's one loan. Same house, same term, $48,000 more out of pocket.
The Car Loan Penalty
Auto lenders use similar tiered pricing. Here's what a $35,000 car loan looks like:
| Credit Tier | APR (New Car) | APR (Used Car) | Extra Cost (5 yr) |
|---|---|---|---|
| Super Prime (781+) | 5.18% | 6.82% | Baseline |
| Prime (661-780) | 6.70% | 9.12% | +$1,400 |
| Nonprime (601-660) | 10.39% | 14.24% | +$5,200 |
| Subprime (501-600) | 13.22% | 18.47% | +$8,900 |
| Deep Subprime (<500) | 15-21%+ | 20-25%+ | +$12,000+ |
On a single car loan, subprime borrowers pay $8,900+ more than prime borrowers. Deep subprime? Over $12,000 extra.
Most people buy multiple cars over their lifetime. The compounding cost of bad credit on auto loans alone can exceed $50,000.
The Credit Card Tax
Credit cards are where low credit really stings. The rate difference is dramatic:
- Excellent credit (750+): 15-20% APR, access to 0% intro offers
- Fair credit (650-699): 22-26% APR
- Poor credit (under 650): 26-30%+ APR, no intro offers
If you carry a $5,000 balance at 28% instead of 18%, you pay an extra $500/year in interest — on that one card.
⚠️ The Subprime Card Trap
Cards like First Premier charge $170 in fees before you spend a dollar. Credit One charges 26%+ with no grace period. These products are designed to extract money from people who don't know better options exist. See ethical alternatives →
Total Lifetime Cost of Bad Credit
When you add it all up:
This is conservative. It assumes just one mortgage, average car buying, and moderate credit card use. For many people, the real number is higher.
The ROI of Credit Improvement
Now flip it around. What's the value of improving your score?
Improving from 620 → 760
And here's the kicker: improving your credit costs almost nothing.
The most effective methods are free:
- Authorized user strategy — Free, 30 days
- Experian Boost — Free, instant
- Utilization optimization — Free, 30 days
- DIY disputes — Free, 30-45 days
Even low-cost options like secured cards (~$200 refundable deposit) or credit builder loans (~$25/month) provide returns of hundreds to one when you factor in lifetime savings.
The Time Factor
Credit improvement takes time, but not as much as people think:
| Strategy | Potential Gain | Timeframe |
|---|---|---|
| Pay down utilization | +20-100 points | 30 days |
| Experian Boost | +13-22 points | Instant |
| Authorized user | +10-50 points | 30-60 days |
| Dispute errors | +50-100+ points | 30-45 days |
It's possible to go from 620 to 700+ in 3-6 months with focused effort. A 140-point improvement translates directly to thousands saved on your next loan.
When Timing Matters Most
Credit improvement is valuable anytime, but certain moments amplify the return:
- 6-12 months before buying a home — Maximum time to optimize for mortgage rates
- Before car shopping — Dealerships pull credit; walk in with your best score
- Before apartment hunting — Many landlords require 650+ or charge higher deposits
- Before job applications — Some employers check credit
If you know a major financial event is coming, start improving now. The ROI is enormous.
The Bottom Line
Your credit score is worth tens of thousands of dollars over your lifetime. A 620 vs 760 difference costs you $48,000 on one mortgage alone.
The math is clear:
- Bad credit costs $100,000+ over a lifetime
- Credit improvement costs almost nothing
- The ROI is hundreds to one
This isn't a "nice to have." It's one of the highest-value financial moves you can make.
Start with our guide on 7 free ways to improve your score, or use our free credit tools to see where you stand.