Credit 101 – Essentials Every Student Should Know
It’s smart to learn how to manage credit now!
As a student, you might not have much experience with credit—you may have your first credit card or a new student loan, or maybe you’re just about to get started. Either way, it’s smart to learn how to manage credit now so that you can create good borrowing habits that will pay off in years to come.
What is credit? A quick refresher.
Quite simply, credit is a form of borrowing money. You pay back the lender (such as a bank or a car dealership) both principal and interest. The principal is the original amount you borrowed, and the interest is an additional charge that compensates the lender for the use of their money.
The importance of a good credit score.
One of the benefits of starting to use credit now is that you’ll begin building a credit history.
Having a strong credit history will help you establish a good credit score, which can help you qualify for a loan or mortgage down the road. It can also help you save money on interest rates and cell phone plans because you would have demonstrated responsible credit behavior. To learn more about the importance of a good credit score, and how to build a strong credit history, read our article A Student’s Guide to Building a Strong Credit History
Read the full guide here