October 20, 2025

Credit Scores Explained: What Every College Student Should Know About Credit Scores

 

Credit scores matter more than you think. But what exactly are they? A credit score is a representation of a person's creditworthiness, providing lenders with an indication of how likely they are to repay borrowed money. The score helps assess financial responsibility based on previous behavior so you can qualify for big-ticket purchases in your adult life.

By understanding what a credit score is and establishing your credit during college, you can position yourself to be better prepared for life after graduation and set yourself up for a better financial future.

What Is A Credit Score?
A credit score is a numerical representation of a person's creditworthiness, indicating how likely they are to repay borrowed money. It’s typically based on factors like payment history, total debt, length of credit history, and types of credit used. The score helps lenders, landlords, and even utility providers assess a person’s financial responsibility before approving them for a loan. 

This score comes from credit reporting agencies, or credit bureaus, which collect and organize data to create reports on consumer credit, which are later given to lenders. The major credit bureaus are Experian, Equifax, and TransUnion, and your financial institution can pick which of these they want to use. 

The standard credit score range is 300–850, and the higher, the better! A good credit score is typically considered to be anywhere in the mid to high 600s or higher. While that may seem high, you can get there in no time by establishing good credit habits now. 

Why Credit Scores Matter For College Students 
Your credit score has an impact on your ability to rent apartments, get a car loan, and can even be taken into consideration (with your written consent) when applying for jobs. When you apply for a loan, lenders analyze your credit score to determine whether you’d be a responsible borrower. The higher your credit score, the better your chance of getting approved!

Having a good credit score can even save you money! Loan interest rates can often be dependent on your credit score. If you have a high credit score, your interest rate could be lower, saving you money over time. 

How Credit Scores Are Calculated 
Credit scores are calculated based on multiple factors that reflect your financial behavior. There are a few different scoring models, but they generally follow a similar breakdown: 

• Payment history (35%) – Whether you pay your bills on time. Late or missed payments can often lower your score, so make sure you’re paying off all those pre-class coffee credit card charges on time. 
• Credit utilization (30%) – How much credit you’re using relative to your total available credit. The general rule suggests not to use more than 30% of your total limit. For example, if your credit card limit is $1,000, you don’t want to carry a balance of more than $300 at a given time. 
• Length of credit history (15%) – How long your accounts have been open. A longer history is typically better, so it’s a good idea to open a line of credit while you’re in college (or sooner) so you can build this before you graduate. 
• Credit mix (10%) – How much variety you have in your credit accounts (e.g. credit cards, loans, mortgages, etc.). A more diverse credit mix is better, but this doesn’t mean you should open multiple credit cards or apply for several loans. It’s most important to borrow wisely. 
• New credit inquiries (10%) – How often you apply for new credit, like applying for a credit card or loan. Too many inquiries in a short period of time could lower your score. 

How To Start Building Credit 
So, how do you build credit in college? Here are some student credit tips to help you get started: 

• Open a student credit card and use it responsibly
• Become an authorized user on a parent’s account
• Use rent and utility payments to build credit (e.g., Experian Boost)
• Monitor your credit score regularly
• Pay bills on time. Don’t leave any bills, especially credit card bills, unpaid. 

Want to fix bad credit or don’t have a credit history yet? Don’t worry! By following these student credit tips, you’ll be able to build credit in no time. The time it takes to improve your credit score can vary depending on how much debt you’re starting with, but most minor events can be recovered in as little as a few weeks or months! 

Secured credit cards and credit-builder loans are also available to help you fix bad credit. 

• Secured credit cards: These are a type of credit card that requires a cash deposit which dictates your credit limit. This way, users can build credit without the risk of missed payments. 
• Credit-builder loans: These loans provide a way for users to establish or restore credit history while building savings! Funds are placed in an account for safekeeping as the user makes scheduled payments, building credit history over the period of the loan. 

There are plenty of ways to start building credit, so follow these tips today to start your credit journey! 

Common Credit Mistakes
Break these bad credit habits today to prepare yourself for financial success. Common credit mistakes students make include: 

• Ignoring student credit card bills
• Opening too many credit lines
• Maxing out credit cards
• Co-signing loans without understanding the risk
• Not checking credit reports regularly

Avoid these common credit mistakes now, so you don’t regret them later. 

Credit literacy is essential to ensuring financial success for your future, and it’s important to start building your credit now. Start small, stay consistent, and your credit score will grow before you know it.

At BCU, we want you to make the most of your credit score with free, ongoing credit score reporting and monitoring with SavvyMoney. Log in to Digital Banking and find your credit score under “Get Your Credit Score” or “Your Credit Score” and sign up to be notified whenever your score changes!

Ready to experience the credit union difference? Become a member of BCU!

*Subject to annual review and credit qualification. Must meet school's Satisfactory Academic Progress (SAP) requirements.