Credit scores. Do you know what yours is? Do you care? At this point in your life, you may or may not have a clue.
Honestly, we hope you fall into the latter category. As a college student, there is no reason for you to worry about your credit score.
But there are a few things you should know about credit, if only to keep yourself from getting in hot water.
There are two types of credit scores, FICO and Vantages.
FICO (Fair Isaac Corp.) is the most well-known type, with a score range of 300 to 850. Anything below 620 is not good. Yet, the average score for age 18–29 is only 637. Why?
It takes time to develop a good score.
The principal factor in credit scores is payment history. Maybe you have had a credit card for a year and have made timely payments, but that doesn’t mean much in the grand scheme of things.
However, if you concentrate on paying your bills on time, pay attention to your levels of debt, don’t over-borrow—both the amount and/or the number of debts you have—and don’t make bad financial decisions, you will be fine.
Here’s what goes into your credit score:
You really shouldn’t worry about it. Seriously.
You’ve got way more important things to concentrate on right now (like getting good grades so you can get a good job so you can afford to do the things that people with good credit scores can—later on).
There are a few services that will provide you with a free credit score—but you’ll pay for the privilege with tempting offers for credit cards and loans and other debt-producing monsters.
But you can get a free credit report every year.
A credit report lists all the things that make up your credit score—and it might contain a few surprises.
Remember the time you and your best friend were window shopping for new cars without ever intending to purchase and at each dealer you filled out a credit application to look legit?
Well, that counted against you because your credit score is affected every time an account inquiry is made. So be careful! Only have other people pull your credit score if you are serious about making a purchase that requires one.
You can get a copy of your credit report at AnnualCreditReport.com.
Concentrate on making sure it’s accurate and that all the activities reported are your activities. Many people find out they’ve had their identities stolen only after looking at their credit report.
Things to pay careful attention to include:
If you see any of these things, take action.
If you have any problems with what’s on there, contact the corresponding credit agency immediately.
And when we say problems, we mean anything that’s the slightest bit wrong.
You should even report errors in mundane information, like current and past addresses. If you missed paying a bill, because of moving, the delinquent payment stays on your credit report for up to seven years. And if they don’t know your address, you’re never going to know of the mistake!
Under the Fair Credit Reporting Act, the credit agency and the company reporting inaccurate information must take corrective action (which you document) and report back to you in 30 days.
