A higher credit score means lower interest rates.

The importance of a high credit score can be easily recognized in the low interest rates paid by qualified borrowers. The assumption is simple. If a person has a higher credit score then they have proven that the risk associated with lending to them is lower. If the risk is lower, it results in access to greater amounts of funds and lower interest rates paid because the lender believes there will be less headache, expense and difficulty in collecting the debt.

For example; during the first quarter of 2009 on a $300,000 30-year loan, someone with a credit score of 760 to 850 could expect an interest rate of 5% with amonthly payment of $1,605. However, on the other end of the spectrum, someone with a credit score of 620 to 640 would expect an interest rate of 6.6% with a monthly payment of $1,914.The difference in the monthly payment would be $309 per month. That really ads up over time.

Over the 30 year period this would mean the person with the lower credit score would have to pay an additional $111,240 in interest. So is it worth your time and effort to maintain a high credit rating or correct a low one? Only if you're interested in getting the most for your money, reducing expense and building a greater extent of financial security. And who isn't? That $111,000 could go a long way toward building up your retirement account.