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

Answer: $312 per month or $112,241 over a 30 year period (typical term for a home loan) which is the difference between the highest credit score (760-850) and the lowest (620-639). Click on image to visit interactive.

Data as of 3/6/23:

Note: Assumes a thirty year fixed rate mortgage for $286,400 

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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 be offered 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, the difference between a 5.5 percent interest rate and a 6 percent rate on a $200,000 mortgage is $64 per month. That comes out to more than $23,000 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. 

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It's Round 3 of the FinCap Friday Frenzy. Just follow these simple rules and your class could earn a virtual visit from Yanely and more! 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.