Everyone says “you need a good credit score,” but credit scores are only ever spoken about in vague terms. Like most people, you likely wonder: What score is “good enough”? Do an extra 100 points really make that much of a difference when my credit score is already decent? Is the effort of trying to perfect my score really worth it?

The truth is that since creditors are all different and interest rates fluctuate, there are never exact answers when it comes to credit scores. However, a recent study done by LendingTree may help to shed some light on the situation. According to their study, raising your score from “Fair” (580-669) to “Very Good” (740-799) could save you around $45,000 over the course of your lifetime. Below is a breakdown of how much a raised credit score could save you on the five most common debts.

Credit Card Debt

Credit cards are a great way to boost your credit score, but they’re also a great way to get yourself into money troubles. Out of the five most common credit/loan types, the average debt due to credit cards is the lowest, but the interest rate is one of the highest. According to the study, the average annual percentage rate (APR) of credit cards is 24.49 for those with fair credit scores and 14.49 for those with very good credit scores.

The average credit card debt amount is $5,265. Someone with a very good credit score would end up paying around $9,059 in principal (the original amount taken out) and interest, but someone with only a fair score would pay $14,688. That’s a difference of $5,629.

Personal Loans

By far, the worst kinds of loans for people with only a fair score are personal loans. The 10 point APR difference for credit cards may have seemed drastic, but it’s nothing compared to the 18.2 point APR hike that personal loan borrowers may face; those with a very good credit score get an average 12.07 APR while those with a fair score face a whopping 30.27 APR.

Personal loans generally have a short time before they need to be paid back, so the interest doesn’t build too much. Still, with a loan term of just 3 years, someone with a fair score will pay around $17,264 on an $11,258 loan, while a person with a very good score will pay $13,475. That’s a savings of $3,790 – which would multiply if you ever had to take out a personal loan again.

Auto Loans

For cars, the average loan amount is $21,778 and the average term is 5 years. With only a fair score, borrowers could expect an average APR of 11.64 and a final payment of $28,829. Those with a very good score could expect an APR closer to 3.97 and a final payment of $24,046. That’s a savings of $4,783.

Student Loans

If you’re like 65% of the population, you went to college. And if you’re like most collegiates, you have student loans to pay.

The process of getting a student loan involves many late-teens who’ve never established a credit line before and many federal programs. Student loans are designed to rely less heavily on credit scores, so the cost difference doesn’t vary too much between people at different credit levels. Still, people with a fair score get an APR that’s about 1 point higher (4.45 vs 3.53) and end up paying back an average of close to $2,000 more than those with a very good score – which is a lot of money to a broke college student.


The difference between the APRs on mortgages of those with fair and very good credit scores is not drastic. However, with large loan amounts and 30 years’ worth of interest build-up, the savings for those with very good credit scores are enormous. With an average APR of 4.58, those with a very good credit score were found to save around $29,106 over those with a fair credit score and average APR of 5.15. Most people would probably appreciate having an extra $1,000 a year.

So all in all, the study found that raising your credit score from fair to very good saves you around $45,283. Imagine what you could do with all that extra money.

If you’re now motivated to save money by raising your credit score, contact Build My Scores. With their credit repair and restoration experts at your side, you’ll get your score into the 700s or higher in no time.