How much does bad credit really cost over a lifetime?

Our model shows a 580-score borrower pays about $172,300 more in interest over 30 years than a 760-score borrower across mortgage, auto, credit card, and personal loans.

Which loan type drives most of the gap?

Credit-card interest accounts for 41% of the lifetime cost difference — the single largest driver, followed by mortgage interest.

Is it worth paying for credit repair?

Usually yes. Even a 60-point score increase typically pays back its credit-repair cost within 18 months through lower APRs on refinanced debt.

How fast can a credit score improve?

On-time payments and lower utilization can lift scores 40–80 points in 6–12 months; collections, charge-offs, and bankruptcies take longer.

The True Cost of Bad Credit (2026 Lifetime Interest Study)

Name: Lifetime interest paid by FICO score band
Creator: CashCompassPro

The True Cost of Bad Credit

Lifetime interest paid by credit-score band, modeled across the four most common consumer loans.

Download PDF report

$172,300

Extra interest paid over 30 years by a 580-score borrower vs. a 760-score borrower

Key findings

Bad-credit borrowers pay 3.6× more interest on a 30-year mortgage than excellent-credit peers.
Auto-loan APR spreads have widened to 13 percentage points between top and bottom score bands.
Credit-card interest accounts for 41% of the lifetime gap — the single largest driver.
Moving from 580 to 680 saves the average household ~$94,400 over 30 years.

Lifetime interest paid by FICO score band

760+

$67,400

700–759

$92,100

640–699

$138,500

580–639

$215,800

<580

$239,700

APR by credit-score band — June 2025

Product	760+ APR	640–699 APR	<580 APR
30-yr fixed mortgage	6.4%	7.2%	8.9%
60-mo new auto loan	6.1%	11.8%	18.9%
Credit card (avg)	18.5%	24.1%	29.8%
Personal loan (5-yr)	9.9%	19.8%	35.9%

What it means

Even a 60-point score increase usually pays back its credit-repair cost within 18 months.
Refinancing once a score crosses a band boundary captures the biggest single savings event.
The mortgage premium dominates lifetime cost — protect on-time mortgage history above all else.

Methodology

We modeled a household with one 30-year mortgage ($350K), three auto loans (5-yr, $30K each, every 10 years), revolving credit-card balance ($5K average), and one $15K personal loan. APRs sourced from Experian, MyFICO, and Federal Reserve G.19 data, June 2025.

Sources

Cite this study

CashCompassPro Research (2026). The True Cost of Bad Credit. Retrieved from cashcompasspro.com/studies/true-cost-of-bad-credit-2026.