8 Things College Graduates and Millennials Need to Know about Their Credit Report

By Dallas Sargent

There are plenty of ways to describe how a recent college graduate might be feeling: excited, relieved, afraid, overwhelmed – especially when real life decisions start coming to the fore, like the issue of credit. But knowing where to start can be the difference between walking across the stage into a bright future and tripping over your graduation gown. Here are 8 things to get you started.

The Difference Between Credit Scores & Credit Reports

While the names are similar, the difference comes about in the details. A credit score is, essentially, a number ranging from around 300 to around 850 that assesses your credit risk. Your credit report, then, is the detailed history of how that score came to be – the repayment history on loans, your current and past accounts, and the like.

Where to Find Your Credit Report

You are allowed to check your credit report once per year for free from each of the three credit bureaus (Equifax, Experian, and TransUnion). You can get this information by visiting AnnualCreditReport.com.

How Your Score Can Affect You

It’s important to know, before getting your first career-centric job, that your credit score does not play a part in whether you will be hired or not.  Generally, companies request your credit history in order to run a background check. It can, however, be pivotal in determining the types of loans you can get for future big purchases, such as buying your first home.

The Art of Patience

There’s no trick to this one. Simply put, your credit score will not change day-to-day, which is why planning ahead and being diligent about payments is so important. As they say, Rome’s good credit wasn’t built in a day.

Bad Credit Isn’t The End of the World

If you check your score for the first time and find that your score is lower than average, don’t fret too much. Having the information means that you can begin taking steps to improve it sooner rather than later. If you find that this applies to you as a recent graduate, don’t worry – the average score for the 18-24 crowd is around a 630.

Not Having Credit Can Be Just as Limiting as a Poor Rating

Many people think they are doing the right thing by avoiding credit cards and loans altogether. The old adage to only buy what you can afford, while not bad advice, won’t increase your credit score. Simply put, you’re building your trustworthiness, and the more you pay off a line of credit, the more trustworthy you become.

Different Debt Exists – And It Can Work For You

The more apt you are at juggling different types of debt, the less risky you become to loan money to in the future. Most students, after finishing college, may have student loan debt. This is only one type of debt, and when payments are made on time along with a credit card, the quicker your credit score will raise. This, of course, doesn’t mean you should run out and sign up for every credit card under the sun; the trick is to keep all different types of debt repayments manageable.

Know Where Your Resources Are

While these tips are a nice place to start, by no means are they a comprehensive list of all that you should know. Knowing where to find answers can be just as important as knowing the answers yourself. A good step to consider is to enroll in a primer class focusing on credit, like the one offered by us. Overall, remember that, as a recent college graduate, you have a lot to be proud of, but remember that this is also just the beginning, and you’ve got this.