If you are able to increase your credit score by only 100 points before applying for your mortgage, you will save more than $200,000 over the course of your home mortgage loan! 

And that’s only if you raise your score to an average level, not even to a perfect score! 

Let’s take a look at some of the details behind this calculation.

In the table below, you will see two columns, one for a credit score of 565 points, which is well below the national average credit score.  The other column is for someone with a credit score of 665 points which is in the normal credit score range (not even a great credit score and you can still see the savings!). 

In the first example, when you have a credit score in the low range, you are paying $1,793 per month to your mortgage company. 

However, if you had raised your credit score before applying for the mortgage, then you would only be paying $1,200 per month to your mortgage company.  That’s a monthly savings of almost $600. 

Wouldn’t it be nice to have an extra $600 every month without having to give up any of the comforts you are currently paying for?

When calculated over the course of the loan (30 years), you are saving much more than $600. 

For a 30 year mortgage, you will make 360 monthly payments (because there are 12 months in a year and 12x36 = 360).  On each and every one of those payments you are saving $593. 

Over the course of the entire loan, you will save $213,480!  That’s enough money to pay for another entire house in cash if you save it all!

It is very important to know and understand your credit score so that you can work to improve it.  A higher credit score will allow you to pay less interest on your loans.