It's why managing your credit score is so important and the lesson on credit scores could be worth six figures in savings. 

Answer: $321 per month or $115,292 over a 30 year period which is the difference between the highest credit score (760-850) and the lowest (620-639). 

Data as of 7/29/24:

Note: Assumes a thirty year fixed rate mortgage for $300,000 over 30 years 

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Questions:

• What do you notice about the relationship between a credit score and the interest rate on a mortgage? 
• Why do you think that lenders charge different interest rates based on a borrower's credit score? 
• What do you think is one way to earn a good credit score? 

Here are the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (Bankrate):

Although it’s up to specific lenders to determine what score borrowers need to receive the lowest mortgage interest rates, a difference of just a few points on your credit score can sometimes affect your monthly payments substantially. For example, on a $300,000 mortgage, the difference in principal and interest payments between a 7 percent interest rate and a 6.5 percent rate is $99 per month. That comes out to more than $35,000 over the course of a 30-year mortgage term.

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NGPF's Arcade Game, Shady Sam, helps students understand credit from a lender's perspective. 

About the Author

Dave Martin

Dave joins NGPF with 15 years of teaching experience in math and computer science. After joining the New York City Teaching Fellows program and earning a Master's degree in Education from Pace University, his teaching career has taken him to New York, New Jersey and a summer in the north of Ghana. Dave firmly believes that financial literacy is vital to creating well-rounded students that are prepared for a complex and highly competitive world. During what free time two young daughters will allow, Dave enjoys video games, Dungeons & Dragons, cooking, gardening, and taking naps.

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