College Graduates & Credit Scores

May 25, 2010

Getting insurance after college was yesterday’s topic, along with a few tips on managing your credit after graduation.

I had a few follow up questions come in about credit reports and credit scores so today I’ll talk more about how your credit can affect your life after college and what you can do about it.

Renting an Apartment

As you’re out looking for an affordable apartment be aware that many landlords will run a credit check before deciding whether to rent to you or not.  Having bad credit or no credit history could lead them to decide not to rent to you at all or charge you a huge deposit to cover several months rent.  If this applies to you and you can talk your parents into co-signing on the lease then the landlord may agree to let you move in.

Buying a House

One of the first things a bank will do when you’re applying for a home loan is to check your credit report.  A poor credit score might mean they won’t lend to you; and even if they will it probably means that you’ll pay a higher interest rate on the money you do borrow.

When my wife and I tried to get a mortgage pre approval when buying a house right out of college, she had no credit history at all and I had great credit.  The interest rates they offered were higher than what I qualified alone for so we ended up applying for the loan only in my name to get a better rate.

Getting Insurance

You might not realize it but your credit history can affect your insurance rates.  The worse your credit, the more you might have to pay for car insurance.  As we talked about yesterday, people in your age group typically have to pay higher rates anyhow, you certainly don’t want to raise them even more.

Credit Reports & Scores

The first step is to learn about the various credit agencies and types of credit scores, such as your fico score.  If you don’t know where you stand, there are several ways you can get a free credit report; I just got my Experian report for free through my American Express card.

Fixing Your Credit

If you find anything incorrect in your credit history, here are some tips on how you can dispute your credit report and have it corrected.  Then take a look at these 5 steps to improving your credit score.

Another option the above article doesn’t discuss is to get a secured credit card.  This takes the risk off the lender and lets you open a credit line that you can use to start building up your credit history.  Of course you have to be smart with your card, here are some college grad credit card tips for picking the right card and using it wisely.

If you haven’t already, you’ll also want to start an emergency fund after college so that when you’re hit with an unexpected expense you don’t have to take on more credit card debt to pay it off.

Today we looked at why having good credit is important and some things you can do to get yours where it needs to be.  Don’t put it off, get started today.  Good luck!


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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3 Responses to College Graduates & Credit Scores

  • andi

    Very valuable information. Will bookmark this. Thanks for sharing!

  • Ace @

    If you are a recent college graduate then another way that you can help your credit score is by calling your credit card companies and asking for a credit limit increase. This is especially worth while if you recently landed a job and have much more income than you did while in college. Be aware though, depending on the amount that you ask for, the credit card companies may do a hard pull. Hard pulls can have a slightly negative effect on your credit score, but should be much less than the benefit of having a higher credit limit.

    I wrote a post about this a while back to explain why.

    Great post Ben, this is exactly the stuff that college grads should know about.


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