Based on my personal experience, I know that most college students aren’t typically concerned with their credit score. Unfortunately, college is a time during which countless students have destroyed their credit score. So while you might not care about your credit score now, there are five key reasons why you should change the way you feel.
1. You could enter into adulthood with a low credit score.
Using credit cards irresponsibly throughout college can severely lower your credit in ways you might not even be aware of. Sure, you probably know that credit scores drop when you max out your cards or fail to make a payment on time. But did you also know that your score drops if you apply for a new credit card, or city government turns your unpaid parking tickets into a collection agency? Dismissing minor financial responsibilities now could leave you struggling for financial credibility in just a few years from now.
2. It could take years to become financially independent.
Students often don’t realize just how frequently businesses consider their credit. Did you know that a low credit score score can prevent you from
- buying a car
- signing a lease for an apartment
- being approved for a utility account (water, electric, etc.)
- qualifying for certain jobs
If you don’t have a parent or guardian who will vouch for you and put their credit on the line for you, having good credit becomes especially vital to your financial independence.
3. Your plans to start a new business could be put on hold.
If you’re planning to start your own business once you graduate college, a low credit score could hinder your progress. Getting a loan when you’re young is tough, and having a poor credit history won’t help your case. New business owners often need a surety bond before they can be licensed to start a business, and those with bad credit might not qualify. Don’t let poor credit card management hinder your ambitions.
4. Paying off student loans will take longer.
If you’re allocating money to paying off credit cards, it’s going to take you that much longer to pay off your student loans. If you’re paying off your credit card debt for years, you’re not going to have much of an expendable income during that time. Without much of an expendable income, putting back funds for a savings account will be even more of a challenge.
5. Building up good credit will be more difficult.
Building up a solid credit history from scratch is hard enough on its own. I was denied by the first two credit cards I applied for simply because I had no credit history. But replace a nonexistent credit score with a bad one, and you’ve got a lot more ground to make up. Salvaging a low credit score can take years. Rather than manage your credit poorly now and try to recover from it years from now, take a preventative approach and handle your credit responsibly from now on.
Danielle Rodabaugh graduated from the University of Missouri with a journalism degree in May 2011. Just two days after she graduated, Danielle began her professional career as a writer, editor and marketing specialist for SuretyBonds.com. As a recent college graduate, Danielle is committed to helping students manage their finances responsibly.