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Taking Charge of Your Credit
If you haven't started already, you will probably start building your credit history while you are in college.
Your credit history begins as soon as you take out a loan. The loan can be in many forms including a credit card, a student loan, or a car loan.
Your timeliness in paying back your loan is reflected in your credit score - a grade that measures how reliable you are with paying back your debt. Also, if you don't pay off the full balance each month, you will be charged an additional amount called interest.
Understanding the Credit Score
The credit score takes into account your repayment track record, the amount of debt you owe, your history with debt, how often you apply for credit, and the types of credit you use. It helps lenders determine how risky it is to lend money to you, which can influence your interest rate and whether or not you qualify for certain types of loans.
When does your credit score matter? Lenders may look at your credit score every time you do one of the following:
Understanding Your Interest Rate
The interest rate is your cost for borrowing. Paying your bill in full by the payment deadline results in a cost saving for you because you will not be charged any interest. By deferring full payment you will begin to incur interest charges on your outstanding balance.
Controlling Your Costs
The amount you will pay in interest will be determined by two factors: your annual percentage rate (APR) and the amount of the outstanding balance.
These factors suggest:
Secure Your Future
Your credit rating is important to your future.
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