Sometimes it’s necessary to borrow for major purchases like an education a car, a house, or maybe even to meet unexpected expenses. Your ability to get a loan generally depends on your credit history, and that depends largely on your track record at repaying what you’ve borrowed in the past and paying your bills on time.  So, be careful to keep your credit history strong.



What is debt?

Debt is money you borrow today and pay back tomorrow. For instance, going to college may require you to spend money you do not have today in the hope that you will land a job tomorrow that will pay you more than you would have otherwise made. Be prudent when taking on debt as it can pile up quickly and the interest charged on it can often dramatically raise the total amount you owe.


What is a credit score?

Your credit score is a number you are given based on your experience as a borrower of credit and also your current level of debt.


Why is my credit score important?

Your credit score is important because it is used by banks to determine whether you are someone they wish to make a loan to. The higher your score, the better, and the better rates and terms banks will offer you.


What can I do to improve my credit score?

Improving your credit score over a short amount of time may be a challenge, but here are some ways you can improve your credit score in the long run. Make sure you pay your bills on time. Reduce your credit card balances. Do not apply for every card or credit line you are offered.


What affects my credit score?

Your credit score is affected by how well or poorly you have paid off debts and bills in the past, and whether you currently have a manageable level of debt. The higher the FICO score, the less risk the individual poses for creditors.


What is a FICO score?

A FICO score provides creditors with information about an individual likelihood of paying back their debts.


How much money should I be willing to borrow for college?

You should borrow prudently, which means that you should only take on an amount that you feel you can reasonably expect to pay back over time. College can be a great investment, but only if you make the most of the opportunity to learn what you need to learn to have a successful job and career path. You will need to make a good income post-college to pay back your debts.



Actions You Can Take

  • Track your borrowing habits.
  • Pay your bills on time.
  • When you need to borrow, be sure to plan, understand and shop around for a loan with a low Annual Percentage Rate (APR).
  • Learn about credit and how to use it effectively.
  • Pay attention to your credit history, as reflected by your credit score and on your credit report. 


Hints and Tips 

  • Borrowing money is a way to purchase something now and pay for it over time. But, you usually pay “interest” when you borrow money. The longer you take to pay back the money you borrowed, the more you will pay in interest.
  • It pays to shop around to get the best deal on a loan. Compare loan terms from several lenders, and it’s okay to negotiate the terms.
  • When repaying a loan, it may be better to pay more than the minimum amount due each month, so you will have to pay less in interest over the life of the loan.
  • One of your most important aids when shopping for a loan is the APR – the Annual Percentage Rate. This is the total cost, including interest charges and fees, described as a yearly rate.
  • Paying your bills on time will help increase your credit score. Even if you fell into trouble with borrowing in the past, you can get on solid footing and rebuild your credit history by making regular payments as agreed.
  • You are entitled to a free copy of your credit report every 12 months from each of the three nationwide credit bureaus. Go to or call toll free 1-877-322-8228 to order the free reports. Beware of imposter sites.