The Importance of Maintaining Good Credit
- Maintaining good credit can mean access to better borrowing and lower interest rates. It also has other advantages like better credit card offers, lower insurance rates and more options on renting or purchasing homes. Lenders are more likely to approve your credit applications if you have good credit.
What is a credit report?
- Your credit report is made up of the last 7-10 years of your credit history. It includes information about the types of credit accounts you have, your payment history and other information about credit limits. It also includes credit inquiries. It tracks how well you paid your bills and if you have too much credit in relation to your income.
What is a credit score?
- Your credit score takes all your credit history and gives you a grade or “score”. Scores can range from 300-800 with the higher score being better. There are three different reporting agencies that each give you a score, Experian, Equifax and Transunion.
As a student what can I do to build a good credit score?
- Use credit responsibly.
- If you decide to apply for a credit card while you are a student, make your monthly payments on time and do not use your credit card for more that you can pay back.
- A parent may allow you to become an authorized user on an existing credit card. This may be a good option if you are under 21 years.
- Pay your rent and utility bills every month on time, early if possible.
- Develop a strong work history, a steady record of income from employment could show that you are more likely able to repay debt.
- When your student loans go into repayment be sure to make your monthly payments on time and reach out to your Loan Servicer if you fall upon financial hardship.
- It is best to set up Autopay wherever possible, life gets busy and you do not want to miss payment due dates.
- Check your bank balance regularly to be sure that you have sufficient funds.
- Check you credit score regularly to review your progress and to monitor for errors or any fraudulent activity
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