Many college students have a lot of worries about what they are trying to accomplish in life. Some are even struggling financially or with building good credit. The average credit score for young adults is 630 (Credit Karma, 2018). Having a good credit score can help someone qualify for lower interest rates and pay lower finance charges on credit card balances and loans.
Having a good credit score can benefit a young adult a lot with lower interest rates. An article written by Kristine Kuchar, talks about how to build a good credit during college. It states, “… your credit can impact you right now, determining your interest rate for student loans. Plus, if you’re thinking about consolidating your loans after graduation, a good credit report could land you a better interest rate,” (2018).
When borrowing money, one is being charged through their annual percentage rate (APR) that represents the actual cost of funds over the year. Fernando Soto, an undergraduate student from UIC, talks about how he qualified for a 10% APR by saying, “When I first applied for a credit card I got rejected so I had to find another way to build [credit]. I got my phone bill under my name and changed the utilities under my name. Six months later a friend referred me to a credit card, I applied and got accepted. I qualified for 10% APR for the first year which is pretty low for a credit card.” Even though he got rejected, he managed to find better solutions, and then qualified for a credit card.
As college students mature from their teenage years, they must learn how to manage their money and try to build good credit. This helps you pay lower finance charges on credit card balances and loans. So what are you waiting for? Make a change in your early college life and start planning to build credit when you are ready!