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Credit Score: What Is It and Why Should Students Build It While in College?

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Updated on June 1, 2023 by
Credit Score: What Is It and Why Should Students Build It While in College?

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It’s no secret that college students often go through financial hurdles. Many of them are forced to apply for scholarships, grants, and financial aid to cover their expenses. And they often have to work too.

The cost of education and life is high. Apart from this, young people have to deal with a variety of additional expenses. Namely, they have to purchase personal items and school appliances. Also, sometimes, they might need to hire an essay writer or tutor from a professional paper writing service to keep their grades high. Typically, all these expenses are covered by financial help programs and accumulate in hefty debts. But here is a thing not many know—banks rarely consider student loan debt when qualifying customers for loans. That is, most college students graduate having no credit history at all.

What Is Credit History and Why Should You Care?

A credit history is a track record of all your credit accounts, loans, credit inquiries, and other details that demonstrate how much money you request and owe, as well as how responsibly you pay them back. In a nutshell, this is a report that demonstrates to banks whether you are a reliable credit user or not.

Today, a credit score affects a variety of things. Since it demonstrates your responsibility, this score affects whether or not you will be eligible for:

  • Credit card;
  • Mortgage;
  • Overdraft;
  • Car financing;
  • Personal loan, etc.

Also, your score will affect how much money you can lend, as well as the interest rates that will be applied.

As was already mentioned, many college students don’t have credit scores at all. On the one hand, many people believe that “no credit” is actually better than having a poor score. Of course, this is true. But having no score at all can also significantly complicate your life now and in the near future.

4 Reasons for Students to Build Their Credit While in College

Since no credit isn’t good enough, many financial experts recommend students start building their scores while still in college. This has a number of benefits and reasons. Namely, starting with your credit score right now makes sense due to the following reasons.

1. Beginner Limits Make It Easy

The first reason to work on your credit while still in college is that it’s incredibly easy during this time. Typically, beginner credit lines have rather small limits (between $500 and $1,000). Also, you can easily connect your credit card to pay for your orders at history essay writing service. That is, you can start using your credit card with small amounts and pay them back quickly to build your score.

2. Gain Access to Future Credit

After you graduate from college, you will likely want to buy a car or house at some point in your life. Unless you have a full sum in cash, you will need a good credit score to make such large purchases. By lending and paying back small amounts of money in college, you can build up your creditworthiness and, thus, boost your chances of receiving a loan, credit card, mortgage, or other financial support in the future.

3. Acquire Positive Credit Habits

Whether you work on building your credit now or not, chances are that you will graduate college with a student debt that needs to be paid off. Needless to say, paying your bills well requires a lot of attention and dedication. By starting to use your credit card early, you will be able to develop good credit habits that will help you pay off your debt and avoid issues in the future.

4. Improve Your Career Outlook

Finally, speaking about the reasons to build credit in college, we can’t avoid mentioning that some employers may check your credit score in the process of hiring. This is a common practice, and by building your history in college, you can expand your future job opportunities and land jobs that require a good score.

The Bottom Line

Building a solid credit history as a student has a lot of benefits. It might not be easy. After all, it will require some of your time, effort, and diligence. However, you can always gain academic support from the best paper writing services to be able to focus on things that matter. Now you know why it matters. So go ahead and start building your credit ASAP!

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