Why Is Credit Score Important

When someone sees the word “credit score” it could illicit numerous reactions. For some images of endless possibilities might come to mind, but for others some will cringe and think of nothing but doom and gloom. In today’s world, the economy runs on credit and having a high credit score is very usefully, especially for a young adult. Whether it be paying for a college education, trying to purchase car, or even just paying for a lunch on the plastic, a company is giving credit to you. A typical college student may be thrilled with the thought of a credit card and becoming a part of the ‘real world’. But as a wise man named Uncle Ben said, “with great power comes great responsibility.” Credit is very important to a person; it could even …show more content…
A credit score, defined by Bankrate.com, “…is a three-digit number generated by a mathematical algorithm using information in your credit report.” It is basically the key to someone’s financial life. Once a person has a credit card, they are rated through this math equation based on how efficiently they pay off their debts. The highest score, which everyone strives for, is the perfect 850 but the average credit score is 723. A college student might think that once they turn 18 a mysterious processes automatically begins and they have the right borrow money just like any other adult. But this is wrong, we are born into this world with a clean slate and no credit score. Even after opening an account to borrow money, a person does not get a score until months later since they are still too new to rate! This means that a person has to work from the beginning to get a good score. After about six months of history, one finally receives their first credit score! Most likely this score will fall below the median of 723, so do not worry. One can boost this number by waiting and opening more accounts. More confidence comes with a longer history of positive payments and diverse history borrowing