Study Highlights:

• Raising a credit score from "fair" (580-669) to "very good" (740-799) saves $45,283 on a common array of debts.

• Mortgage costs account for 63 percent of the savings ($29,106 in savings with very good credit score versus fair).

• Paying the minimum balance on an average credit card debt represents the second largest difference, with about $5,600 in savings for a very good versus a fair score. That amounts to someone with fair credit paying 248 percent more in interest than someone with good credit.

• Personal loan borrowers can expect to pay 271 percent more interest on the same loan if they have a fair credit score instead of a very good one, and auto loan borrowers can expect to pay 311 percent more in interest.

Five Common Debts

Everyone's debt profile is different, but it's typical for an American consumer to buy a condo or house (average mortgage size: $234,437), purchase a reliable car (average loan size: $21,778), take out a personal loan to consolidate old debt (average loan size: $11,258), rack up charges on a credit card (average debt size: $5,265) and pay off some student loans (average debt size: $37,525). That adds up to $310,263 for a lifetime of common American debts. A few things about that figure:

• While the average American may not have $310,263 of debt all at once, it's still common for borrowers to overlap some or all of these debts at the same time or in close sequence.

• It's likely a low estimate of lifetime American debt, because consumers often have more than one loan of each type throughout their lives.

Still, $310,263 is a lot of money, especially when considering how much all of that debt costs in interest and fees. Assuming a borrower pays every one of these bills on time, this range of debt will cost someone with a very good credit score (between 740 and 799) $212,498 in interest. With a fair credit score (between 580 and 669) a borrower is still likely to qualify for similar loan amounts but can expect to pay around $257,781 in interest and fees, a difference of $45,283. 

To put that in perspective, the median earnings for Americans in 2016 was $31,334, before taxes. It would take most Americans well over a year to collect $45,283 of interest via take-home pay — money they would never have to pay if they had good credit.

Even with only one of these loans, the borrower would still see significant savings with a very good credit score. Take a mortgage for example: Assuming every other factor is equal, someone with a very good credit score would have a monthly mortgage payment that is $81 less than someone with a fair credit score. The person with very good credit could invest that money, use it to pay down debts faster or to increase the down payments on future loans, which would exponentially increase the value of those savings over that same 30-year period.

"The idea of managing one's credit score can be intimidating and may seem like a lot effort," said Kali McFadden, senior research analyst and repot author. "The good news is that it's not as complicated or opaque as many people fear, and it isn't remotely comparable to the time, effort and stress it takes to work for $45,283 in net earnings."

McFadden continued, "Credit monitoring can be an essential key to the process because it helps people build awareness of what is currently affecting their scores and how ongoing decisions can change the score. For instance, My LendingTree alerts users to significant changes in their credit report within 30 minutes."