In a few months, the newest cohort of bright-eyed recent graduates will enter the workforce and begin "adulting." If you're graduating college this spring, you've probably received a lot of advice about pursuing your passions or finding a job – but probably not about maintaining your credit score.
The main takeaway: your credit matters. Learning how to maintain your credit wisely can put you one step closer to financing major expenses like a car or a home. Your creditworthiness is comprised of two components:
Credit Score: Your credit score is a single number that helps lenders decide how likely you are to repay your debts. Your score ranges from 300 – 850 points and is based on your payment history, amounts owed, new credit, and the types of credit you use. Generally, the higher your credit score the more options will be available to you, including a lower interest rate for those larger purchases in life.
Credit Report: Your credit report is an official record your credit history that includes money you've borrowed, your history of paying it back, and how much open credit is available to you.
Whether you're just starting to build your credit history or are working to improve your credit score, here are four tips to help keep you on the right track.
To learn more about credit, check out our free CreditSmart® financial education program.