College students don’t seem to realize the importance of having a good credit score.  If you plan to go to grad school, buy a car or house or get married, having a bad credit score can be pretty costly.

A bad credit score…

Can’t get you a low interest rate on loans. If you want to buy a new car, having a credit score in the 600s will give you an interest rate at about 5% higher than you normally would. If you’re in the 500s, like many college students are susceptible of being, your interest rate on a car is probably 19-22%! The same applies to loans you would receive for a new apartment or higher education.

Can’t get you a new house. Over a 4-5 year automobile loan, you can probably afford to pay the extra amount a month to make up for interest; you’ll probably pay a few thousand extra in total. But having a super high interest rate on a home mortgage of $120,000+ will probably make you reassess your options of buying a house. Your mortgage payment would be hundreds of extra dollars a month, preventing you from buying a home.

Download: College Finance 101’s Budgeting Program to find out how big your interest payment would be on any loan amount. Free.

Another thing about credit score is you marry into it. Literally. If your fiance has a bad credit score, the moment you get married, their score reflects “your score”. So if you have a great score, and your future husband/wife has a bad score… well, you now have a bad score. It doesn’t seem fair, but that’s the nature of the beast.

To learn more about your credit score and the credit industry, click here.

For survey results from Sallie Mae’s Survey,
How America Pays For College, click here.

To check your credit score for free, click here.

To apply for the Discover Student credit card for free, click here.

College Finance 101’s Student Loan Section, click here.

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