Newsletter

Welcome to Rising Wealth, Rising Stars – your go-to newsletter for financial literacy tips, money-saving hacks, and campus resources designed to help you thrive both in and out of the classroom. 

In this issue of Rising Wealth, Rising Stars we’re tackling credit scores—what they are, why they matter, and how to boost yours.

Understanding Your Credit Score: A Guide for College Students

As a college student, you might not think much about your credit score—but it plays a huge role in your financial future. Your credit score can determine whether you get approved for a car loan, an apartment, or even a credit card. Understanding how it works now can save you trouble later.

What is a Credit Score?

A credit score is a three-digit number that represents your creditworthiness, or how likely you are to repay borrowed money. The most common credit scoring model is the FICO Score, which ranges from 300 to 850. The higher your score, the better your chances of getting approved for loans and securing lower interest rates. 
 

What Factors Affect Your Credit Score?

Your credit score is determined by several key factors:

  • Payment History (35%) – Making on-time payments is crucial. Late or missed payments can lower your score.
  • Credit Utilization (30%) – This is the percentage of your available credit you’re using. Keeping it below 30% is ideal.
  • Length of Credit History (15%) – The longer you've had credit, the better. Even keeping an old credit card open can help.
  • New Credit Inquiries (10%) – Applying for too many credit accounts in a short period can lower your score.
  • Credit Mix (10%) – Having different types of credit (such as credit cards, student loans, and car loans) can be beneficial.

Why Does Your Credit Score Matter?

Your credit score can impact your life in big ways. Let's break this down: Let’s say you're looking to buy a new car, and choose to finance it. If your credit score is on the higher side, 720 for example, you may qualify for a low-interest auto loan, saving you thousands of dollars over time. But if your score is on the lower end, 550 for example, you might get denied or stuck with a high-interest loan, making the car much more expensive.

 

How to Build Credit as a College Student

If you’re just starting out, here are some easy ways to build your credit:

  • Get a student credit card: These are designed for beginners and often have lower credit limits.
  • Become an authorized user: Ask a parent to add you to their credit card account.
  • Pay bills on time: Even utilities and phone bills can help build credit if reported.
  • Take out a small loan: A student loan or a small personal loan can help establish credit history.

Pro Tip: Your credit score matters as much as your GPA. Start building it with the Student VISA Credit Card from CASE Credit Union, perfect for beginners. Plus, enjoy a low, fixed rate with no surprises! Learn more >

Common Credit Mistakes to Avoid

  • Maxing out credit cards: High balances hurt your credit utilization ratio.
  • Ignoring bills: Late payments can tank your score.
  • Applying for too many credit cards (Yep, even credit cards from your favorite store): Each credit card application triggers a hard inquiry, which can lower your score.

Pro Tip: Check your credit report for free once a year at AnnualCreditReport.com to spot errors and track your progress.

Final Thoughts

Your credit score is like a financial report card—it takes time to build, but the effort pays off. By understanding how it works and making smart choices, you’ll set yourself up for success when it’s time to buy a car, rent an apartment, or even start a business. Start small, stay consistent, and watch your credit score grow!