As I’ve written before, having bad credit will cost you lots of money in the long run. Bad credit means higher interest rates (assuming you can even get a loan in the first place) and fewer options.
Residents of the District of Columbia (while not technically a state) pay the most in interest over their lifetimes — $451,890, which includes an average new mortgage balance of approximately $462,000. D.C. residents also have an average credit score of 656, close to the U.S. average of 687, according to Credit.com, which calculated the figures based on a 30-year mortgage, average car loan balance of $22,750 (assuming nine car loans over one lifetime) and 40 years of revolving credit card debt.
656 is technically on the upper fringe of subprime territory, and the national average of 689 isn’t that great. There’s a lot of room for improvement for our country.
If you’re curious, you can play around with this calculator to see how your lifetime cost of debt changes based on your state, age, and debt levels.
The results will be similar for most people: if you have bad credit, you will pay roughly twice as much in interest as if you have excellent credit.
Credit repair is more important than ever.