Building Your Credit History

Right about now High School graduates are heading to college for the first time. Chances are these students don’t have a credit history because they have never really needed it. Right about now they probably have many credit card offers coming in the mail constantly and what’s more exciting to a college student then getting approved for money?!

            Building your credit history does not mean go out and apply for all the credit card offers you have received.. Building your credit is actually pretty easy if you follow the right steps.

-Q. What is a credit score?

             *A. A credit score is a number between 300 and 850.

-Q.How is your score determined?

                       *A.   Payment History – 32%

                                  Utilization- 23%

                                  Balances- 15%

                                  Depth of Credit- 13%

                                  Recent Credit- 10%

                                  Available Credit- 7%

-Q.Why should I care about my credit score?

                      *A. Your credit score can directly affect almost every important aspect of your life.

                            * Applying for a auto loan
                            *Getting car insurance
                            * Getting a credit card
                            *  Getting a cell phone
                            * Getting cable TV or Internet
                            * Getting any utilities turned on
                            * Getting  a job
                            * Buying a house
-Q.Why do I care?
                      *A   Let’s say that you are going to buy a car for $25000.00.

                               Scenario 1 : Your credit score is 580, so your interest rate will be 18.0% for 60 months..The monthly payment would be $634.84

                               Scenario 2 : Your credit score is 720, then your interest rate will be 5.7% for 60 months the payment $479.84

                               As you can see the higher score saves you not only $155 a month but also $9300.00 over the life of the loan

-Q. Who are these credit score people?

                       *A There are three major consumer credit reporting agencies – Equifax-  Experian-  TransUnion

-Q. How can I make sure to keep my credit in good standing?

                      *A  Pay your bills on time. Delinquent payments and collections can have a major negative impact on your Score.

                              If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score.


Be aware that paying off a collection account, or closing an account on which you previously missed a payment, will not remove it from your credit report. Your score will still consider this information,  because it reflects your past credit pattern.