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How to Make Credit Work for You
According to Nellie Mae, 81% of college freshman have at least
one credit card. And for good reason. Credit cards enable online
purchase from text books to concert tickets, make it possible to
rent a car, and help with medical emergencies or vehicle breakdowns.
Used wisely, credit cards can be helpful throughout college, and
can assist you in the development of financial management skills.
As soon as you get your first credit card or loan, you have entered
the world of credit reports and scores. A credit report is compiled
by credit bureaus and contains information about your identity and
credit relationships, among other things. Credit scoring is a system
that lenders use to help determine your 'credit worthiness.' Credit
scores are based upon your bill-paying history, the number and type
of accounts you have, late payments, collection actions, outstanding
debt and the age of your accounts.
It's vital to know that your credit score affects your ability
to get loans, car loans, and home mortgages. Future jobs and insurance
premiums can also be influenced by your credit score. By paying
your bills in full or in a timely manner, a credit card will help
you establish a good credit score. Late payment or no payment will
help you earn a poor credit score. For more information on credit
reports and scores and how they affect you, check out CardRatings.com.
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