Hey Students, we are back with the most important question- How important is credit to you as a student? It is essential to build credit while you are young in order to set yourself up for future success. With a high credit score, you are more likely to qualify for the lowest interest rates and fees on new loans and lines of credit.
Is credit truly necessary?
You may be unable to obtain a low-interest rate on a refinance, personal loan, or credit card if you do not have good credit, and you may end up paying more over the life of your loan.. However, if you build a good credit score, you can save money on interest payments and invest the savings in your future.
Why Is It Important to Establish Credit While Young?
A good credit history entails more than just being able to use a credit card to make purchases. As a truly self-sufficient adult, you’ll need to be able to rely on your credit history for everything from obtaining a cell phone and utilities in your name to qualifying for the best car insurance rates, etc. Your credit history will have a significant impact on whether your applications are approved or not. It will also determine how much interest you will pay and whether you will be required to pay additional security deposits.
LET’S LOOK INTO THE FACTORS-
Good Credit vs. Bad Credit
Having good credit means that you will have to be make regular!! On-time payments on all of your accounts until your balance is paid in full. Put it another way, bad credit indicates that you have struggled to keep your end of the bargain; you may not have paid the full minimum payment or made payments on time.
Credit and Student Loans
All the national consumer reporting agencies receive information about your student loan payments, whether they are made on time or not. Your servicer begins reporting on your loans as soon as they are disbursed.
- Payments are made
Your scheduled payment amount determined by your repayment plan appears on your credit report once you begin repaying your student loans or credit. If you make your payments on time each month, then your student loan account will continue to show pays as agreed or current.
- Payments Omitted
Every 30 days, your student loan payments whether it’s on time or late, are reported. No one can remove a late or missed payment from your credit history!!! Unless there are extenuating circumstances or it is determined that you were in school, on deferment, or in your grace period.
If you miss too many payments, your loan may become delinquent. When this occurs, the account status changes to claim has been filed with the government. Which indicating that the account was paid by a government claim, resulting in a zero balance. Defaulting on a loan lowers your Credit score and makes it more difficult to obtain new lines of credit. If this occurs, contact your servicer to learn about options for rehabilitating your loan and getting your account back on track to improve your credit score.
Don’t forget that StuCred has your back! Be sure to always refer to our blog for further tips on financing your future.
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