What You Need to Know about Credit

Your credit report and credit score are important assets that influence your ability to obtain commercial loans, Graduate Plus loans, credit cards, jobs, or even your license to practice law. The more you understand about the credit reporting process and how the score is determined, the better decisions you will make about your finances.

Your credit report is the history of how you have handled previous financial transactions and is an indication of how you will conduct yourself in future financial situations. If you have a record of missed payments, of charging your credit cards close to the limit or have had other difficulties such as a lien or judgment, your past credit could be the basis for denial of a new credit request or the reason for you to be approved at a high interest rate. An employer may decide that a candidate’s credit history makes them an unreliable employee. For state bar examiners, a poor credit report could be a reason for an applicant to be denied a license to practice law in that state.

Students should request a free annual credit report from annualcreditreport.com. This site allows you to pull your credit report from all three major credit bureaus, Experiean, Transunion, and Equifax - at no cost.

Your credit is summarized through a credit score. Credit providers such as commercial lenders use the credit score in the same way that a prospective employer looks at your GPA; it is an overall assessment of your ability to manage your finances.

If you have been denied credit, or know that you have credit problems that are likely to result in a commercial loan/Graduate Plus loan denial, you should objectively assess your credit report. After completing your assessment, make an appointment to talk about credit issues with Financial Aid Office staff. Print and complete your assessment matierals and bring them with you to your appointment.

A self-paced tutorial on what you need to know about credit and its use is available.