Personal Finance: Savings from a better credit score
By Matthew Benjamin
Posted 9/22/05
For your own pocketbook, it's never too late to improve your credit score. A study by the Consumer Federation of America and Providian Financial says that consumers could collectively save $16.4 billion a year just on credit card finance charges with some minor improvements.
Mark Lennihan–AP
A consumer with an average credit score–about 700 on a scale from 300 to 850–would reduce card finance charges by $76 each year by increasing his score 30 points, the report estimated. High scores bring other savings, too. Consumers with credit scores above 760 will pay, on average, $1,848 less in annual mortgage payments than those with scores below 620, according to Fair Isaac.
How do you get your score higher? Here are some simple steps:
- Pay bills on time.
- Don't run up the balances on your cards.
- Pay off debt rather than just shift it from one account to another.
- Use up no more than 60 percent of your credit line on your cards.
- Check your credit reports regularly to make sure they're error free.