Give Me My Dam Money!
Dam Credit Scores: How interest rates and credit scores could ruin your life.
Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
Understand that interest accrued over the life of any loan is how banks and lenders make money off of us, the borrowers. And your credit score is the measure by which lenders decide what interest rate you will receive.
There is a stark contrast in the amount of interest you will pay when buying a car with a superprime credit score as opposed to doing so with a subprime credit score. For example, the interest paid on a car loan worth $20,000 with a credit score above 780 (superprime) will be roughly $1,000 over fours. However the interest payment on a car loan of the same amount and same repayment period but with a credit score below 600 (subprime) would be nearly four times as much. It doesn’t have to be a car, it could be a house or a boat, or any other large purchase.
Building a good credit score now while you are in college will make your life much easier after graduation and save you thousands, if not hundreds of thousands, of dollars.
Contact the Financial Literacy Peer Education Program to begin taking control of your credit today! DM us on Instagram at Umf_Finlit or send me an email at caleb.grover@maine.edu to set up an appointment.