How your credit score may save you big money

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HOW YOUR CREDIT SCORE
MAY SAVE YOU BIG MONEY car


How credit score can impact an auto loan

You're constantly surrounded with info about how important your credit score is. Fact—your credit score has a big impact on your money. Let's test drive this with auto loans.


SERENA AND JUSTIN


Serena and Justin are best friends and both 24 years old. They want to buy the same car (in different colors).

Example of 2 friends buying a similar car but with different credit scores

Serena and Justin want to finance their cars. Here are the details:

  • Both saved $15,000 for their down payments
  • Each car has an MSRP (sticker price) of $35,000
  • Both will need to borrow $20,000 for 5 years

DID YOU KNOW?

The average new car loan amount is $35,163.1

SAME LOAN FOR THE SAME CAR?

What's standing in the way of these two besties getting the same loan for the same car? 135 points.


Higher credit score equals lower total interest rate paid over 5 years for auto loan

Serena's credit score of 790 gets her a low interest rate and monthly payment.


Total interest paid $2,002

She will pay just over $2K2 in interest to borrow $20K over the next 5 years.

DID YOU KNOW?

The average monthly car payment is $575.1

THE IMPACT 135 POINTS CAN MAKE


Lower credit score equals higher total interest rate paid over 5 years for auto loan

Justin has a credit score of 655. Not too bad, right?


Total interest paid $5,640

Wrong—Justin’s credit score gets him a higher annual percentage rate (APR) and monthly payment than Serena. He will pay more than $5,6002 in interest to borrow $20K over the next 5 years.

This 135-point credit score difference will cost Justin $3,600 more in interest than Serena. Seems unreal!

DID YOU KNOW?

Currently, the average car loan length is just under 70 months.1

YOUR CREDIT SCORE MATTERS


What a monthly payment and APR might look like with a higher credit score

Being in control of your credit score can save you big money when it comes to loans.


What a monthly payment and APR might look like with a lower credit score

This savings allows you to focus on what’s important to you—just ask Justin.

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