The College Girl’s Guide to Credit

I’ll just charge it.

By Jenn Inzetta

The solution to every shopping problem any girl has ever had. It’s quick. It’s efficient. And swiping a pretty piece of plastic that closely resembles a gift card distances you from the reality that eventually you’ll have to actually pay that money.

Now don’t get me wrong. Credit cards are awesome. You don’t become the owner of more shoes than there are days in a month by not liking credit cards. But that doesn’t mean that they’re not a dangerous little deviants that should be kept at a distance until they can be handled properly. And by handled properly, I mean, paid off promptly. Because the longer you put off those payments the worse it gets and the worse your credit score gets. What’s your credit score, you ask? Well, ladies, that’s a good question. In fact, it’s the question most of this post is dedicated to answering. So take a deep breath and bear with me here.

Your credit score is like a report card for you finances. When you want to take out a loan, get another credit card or do anything that involves anyone giving you any amount of money, your credit score will come into play. Banks and business people want to know how likely you’ll be to pay back the money they’re lending you and how much of a risk you are. The higher your credit score is the more likely you’ll be to get approved for a loan and the better your interest rates will be.

There’s more than one type of credit score but the most commonly referred to score, and the one that banks will most likely be looking at when checking your background, is your FICO score.

These scores range from 300-850, and most people will have scores within the 600-800 range. However, any score above a 720 will get you good interest rates when applying for a loan. (Want to know those interest rates are? Check out this chart right here. )

Your score changes as your credit activity changes. When you don’t pay your bills, and build up interest on those outstanding bills, or attempt to use your credit card after you’ve already hit your limit, your credit score goes down.

It seems simple enough, but improving your score is really just as simple. You improve your credit score by paying your bills on time. By not charging beyond your means. By opening credit card accounts but staying out of debt. Even if that means opening an account and not using the card. And that’s partly why it’s so tricky. You can’t have a good credit score if you don’t actually have a credit card. But if you have that credit card, you can’t use it unless you can pay it off.

It’s quite the dilemma, ladies, but hopefully I’ve (along with a little help from dummies.com )have shed a little more light on the situation for ya.

So remember charge responsibly…and stay far away from shoes stores.