05.04.07 | What’s this “credit score” thing?
You’ve heard your parents discuss it when they applied for a mortgage. And maybe the dealership asked for your score when you bought your car? So, maybe a formal definition of this elusive statistic is in order.
A credit score is formally defined as “the credit worthiness of a borrower, which is primarily determined by the timeliness of past loan payments via a number score ranging from 300 to 900″.
What does this mean?
It simply signifies a level of trust. If you’ve been good about paying back loans in the past, statistically you should do the same for any future borrowing you might do.
Student credit cards are an easy way for you to initiate building your reputation and level of trust. Start small. Charge only a few things at a time. Just be sure to pay everything back, as student credit cards have very high interest rates.
Looking for more info on credit scores?
Or are you more interested in an overview on student loans?