Getting — or keeping — a credit score of 750 or higher can give your finances a boost in a big way. “A higher score will get you lower interest rates and lower interest rates can save you hundreds of thousands over your financial lifetime,” says Elisabeth Leamy, author of Save Big.
Take an average car loan as an example, Leamy says. If you want to borrow $25,000 with a credit score of 635 — which isn’t rock-bottom but isn’t awesome, either — you could wind up paying an APR about 6 percentage points higher than someone with a top-notch score. Over the life of a five-year loan, that adds up to a difference of about $3,500, she says. The potential savings for high scorers is even more pronounced when it comes to mortgages. Getting the best available rate will easily save you tens of thousands of dollars over the life of the loan.
The first step to improving your credit score is to know what your credit looks like. You can see your credit reports from each of the three big credit bureaus for free at annualcreditreport.com.