Credit
Roxanne Szal, Upsilon Beta/
Rollins College
Ellyn Svennungsen, Omicron Mu/Cal Polytechnic State U–San Luis Obispo
Dear Roxanne and Ellyn,
Establishing credit is a good thing. Credit allows
you to purchase cars, homes, and other items.
Credit cards, and using them sensibly, can allow
you to build good credit, which ultimately can
support a good credit score. Your credit score
gives lenders and creditors a quick assessment
of your financial history through a score ranging
from 300 to 850. You can expect lenders to review
credit scores, but lenders tend to use FICO
scores, which are determined by the Fair Isaac
Corporation. As you would tend to think, the
higher the credit scores . . . the better your credit.
Many use credit cards to purchase any item in
the world: clothing, food, gasoline, college tuition,
books, rental cars, etc. However, before
using a credit card, you must be approved for
one. Many banks and department stores offer
credit cards. The creditor must verify that
you are a good candidate for credit and that
you are financially able to repay the debt. But,
most credit card organizations do offer college
students’ credit cards to help them get started in
establishing a line of credit prior to graduating
from college.
Although credit cards can prove to be a beneficial
financial tool, you can accumulate much
debt if not careful. And, if you fall behind on
paying off your monthly bill, creditors tend to
have late fees and this could affect your credit
score. If you go over your limit, the creditor may
charge a fee as well.
Credit cards are handy and offer easy access to
most items, but it is important to live within
your means and not to spend more than you can
actually afford.
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