Credit Score Tips for College Students

Students who just graduated from high school and just entering college are not likely to have credit. Therefore, they may not even know what a credit score is or how they can maintain it.

What is a credit score?

Before we offer you some tips on how to maintain a good credit score as you build up a financial history, you need to know what a credit score is. This is a numerical value based on different aspects of your financial history that represents your overall creditworthiness as a person.

It determines how responsible you are with money and whether you would eligible for house or car loans (among other financing) in the future. It can even determine whether or not you will be able to get a cell phone that is not prepaid.

Practical Tips

If you want to build your credit history and maintain a good credit score you should do one or more of the following:

  • Do not assume that you can just apply for one type of credit and have a good credit score. No matter how responsible you are it looks better if your records show you use a variety of different types of credit.

Car loans or credit cards are two prime examples of financing that are available to students. A student loan would be another.

  • Be careful about closing too many of your financial accounts too soon. For instance, if you close your credit card accounts without paying off the balance it can hurt your credit score. Leave some of them open.
  • Having no loans or no debts will not improve your credit score. The only way it would is if you have had a credit history for awhile.

However, if you never have applied for a credit card, never have applied for a loan or never tried to get financing for a house or car you probably have no credit. Your credit is not considered poor in this case, but it is not considered good either.

What it means is that you have no record of ever having borrowed money (except for cash from your parents or family). If you do not have record borrowing money on your credit report, you have no record of being able to handle paying money back either.

  • Use only honest means to build your credit score. For instance, do NOT try to assume a new identity or lie on loan applications. You will only put yourself in danger of serious trouble later on.