Bad credit can cost you thousands of dollars a year in excessive interest charges. The difference between living life and struggling to survive is based completely on credit quality. Let’s look at a car as a simple example. Most people in today’s society need a vehicle to get around.

A $20,000 car loan with good credit will cost approximately $322 monthly. This is based on a 5% interest rate for 72 months. The exact same $20,000 car loan with bad credit will cost approximately $541 monthly. This is based on a 21% interest rate for 60 months (bad credit means a higher rate and shorter term).

This is the same car, but one is costing $219 more EVERY month. The person with good credit will pay $23,184 for their car. The consumer with bad credit will pay $32,460 for the same car. That’s a $9,276 difference. This means the same car will cost the consumer with bad credit 46% more than the one with good credit.

These examples are not extreme. These are based on common interest rates you will actually see on a $20,000 auto loan.

Rent and home expenses are another area where customers get taken for great amounts of interest. A $100,000 mortgage costs a good credit consumer $577 monthly and $207,720 over 30 years. The same home would cost a family with challenged credit $841 monthly and $302,760 over 30 years.

The consumer with good credit will pay $264 less per month and save $95,040 over the lifetime of the loan. That means the person with bad credit will pay $95,040 more in interest for a $100,000 loan, due to their credit.

Credit cards, utility payments and insurance payments could also cost more, based on credit, and so could many other regular family expenses.

Most people know credit has an adverse effect on their life. But the truth is, bad credit controls their lives.

Outrageous amounts of extra interest are being charged each and every month. That debt and those higher payments strap most families, forcing them to live paycheck-to-paycheck.

Author's Bio: 

About the Author - Kim Carpentier is Owner and General Manager of Valley Credit Builders ( He is using his 35 years of successful business ownership, and transition, to help small business owners build business credit so they can separate the financial responsibilities between business and personal credit. He specializes in helping business owners establish excellent business credit scores and then leverages those scores to access cash and credit for their businesses without their personal guarantees. The Business Credit and Funding Suite is the leading business cash and credit access system in the world today.