Making the grade when it comes to financial matters
July 01, 2021
As a high school or college student, you probably often aspire to getting a good score when it comes to your classes.
But the need for good scores doesn't stop at the classroom door.
Your credit score, or FICO® score, is a measure of your financial health. It is the one score that will be with you for a lifetime and impact many aspects of your life, such as how much you pay in interest rates or even for insurance.
A good credit score is an indicator of how well you manage your money. Good money management is a skill that will help you as you begin your life after college – especially if you have student loan payments after graduation.
Increasing your credit score takes time but is worth the effort. Here are some tips for improving your score:
- Pay your current debt in full.
- Make payments on time.
- Show a history of making six to nine consecutive, on-time payments.
- Do not apply for any additional credit cards.
- Stop using your credit cards.
- Keep your oldest account open – even if you no longer use it.
Part of your credit score is based on the length of your credit. If you choose to close your credit card, notify the issuer via registered letter, and keep a copy of the letter for yourself. By documenting your request, you have proof that you chose to close the account, not the issuer (for example, due to bad credit).
If you need information or counseling, you may want to review the money management resources on Mapping Your Future or reach out to a credit counseling agency. Be sure to look for free counseling.