Credit: What It Is And Why You Need It

By Megan (Weyrauch) Johnson on September 17, 2016

As a college student, do you know your credit score? Or more importantly, do you know exactly what a credit score is?

According to a recent press release, you can check your FICO® Credit Score for free using Discover’s new Credit Scorecard, even if you are not a Discover customer.

A FICO® Credit Score is a three-digit number calculated based on data from your credit report, including money you owe to creditors, payment history and length of credit history, and types of credit (revolving loans like credit cards and installment loans like student loans). The rule is the higher your credit score, the more “credit worthy” you are in the eyes of lenders, which means you are more likely to qualify for better rates and terms for future loans.

Why does your credit score matter? You cannot rent an apartment or purchase a car on a lousy credit score! So, check your score regularly and if you do not have one, start working on establishing one. Additionally, 90 percent of top lenders use your FICO® Score, which is why it’s important to check this score frequently!

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In addition to finding your FICO® Score through Credit Scorecard, you can see a summary of some of the data that determines your score.

Do you have limited or no credit history? Here are some tips from Discover on how to get started.

1. Check your credit health: Stay on top of your financial health to make sure your score stays high for when you’ll need it (AKA, for that new car or house after graduation). A Discover survey found 73 percent of people who checked their credit score seven or more times a year said checking their score had a positive impact on their credit behavior, including paying bills on time.

2. Get a student credit card: Start a student credit card to lay the groundwork for a healthy credit score. Companies often offer a student version of their popular cards. For instance, the Discover it® chrome for Students card offers the same benefits as Discover’s non-student cards, such as flexible rewards and 100 percent U.S.-based customer service. You’ll also get your FICO® Credit Score for free on monthly statements and online.

3. Pay your bills on time!: What makes up about 35 percent of your FICO® Credit Score? Payment history. Pay your bills on time to create a good payment history and appear less risky to lenders. Automatic payment options can help you make paying bills part of your routine, and budgeting for your bills will make sure you cover all costs.

One of the largest card issuers in the U.S. since its 1986 inception, Discover offers millions of merchant and cash access locations. Learn more about Discover here.

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