Skip Navigation
Edvisors Star Logo
Edvisors Logo
  • Compare Lenders
      • Compare Lenders
      • Best Private Student Loans in March 2023
      • Student Loan Comparison: Federal Loans vs Private Loans
      • Parent PLUS Loans vs Private Student Loans
      • How Does Interest on Student Loans Work?
      • Private Student Loan Cosigner: Everything you Need to Know
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Compare Lenders
      • Best Student Loan Refinance Companies for March 2023
      • Federal Student Loan Repayment Plans
      • Student Loan Forgiveness: How to Get Student Loans Forgiven
      • Repayment Plans for Private Student Loans
      • Parent PLUS Loan Forgiveness
      • View All Articles >
      refinance student loans with college ave get started

      This is an advertisement.

    • Private Student Loans
    • Refinance Student Loans
  • Plan for College
      • Best Job Search Sites
      • Resumes That Get Noticed
      • High Paying Careers
      • STEM Careers
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Measuring Academic Fit: Reach, Match and Safety Schools
      • Need-Blind Admissions
      • How Long is a College Essay
      • When are College Applications Due
      • How to Write a Good College Essay
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Filing the FAFSA 2023-24: A Simple Guide for Students
      • FAFSA Deadlines for 2023-2024
      • FAFSA FAQ - Your FAFSA Questions Answered
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Most Popular Scholarships for College Students in 2023
      • Apply for Free Scholarships for College
      • College Scholarships for Kids
      • Most Prestigious Undergraduate Scholarships
      • Las mejores becas para estudiantes hispanos y latinos
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Pay for College
      • Tuition Payment Plans
      • Pros and Cons: Borrowing From My 401K to Pay for College
      • Paying College Tuition with a Credit Card
      • Best Ways to Pay for College Without Financial Aid
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Financial Aid Disbursement: When and How You Will Get It
      • Should I Pay Off My Student Loans Right Now
      • How to Minimize Student Loan Debt
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

    • Careers
    • College Admissions
    • FAFSA
    • Scholarships
    • Paying for College
    • Student LIFE Blog
  • Student Loans
      • Filing the FAFSA 2023-24: A Simple Guide for Students
      • FAFSA FAQ - Your FAFSA Questions Answered
      • FAFSA Deadlines for 2023-2024
      • FAFSA School Codes
      • FAFSA 2023-2024 Guide & Resources
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Best Private Student Loans in March 2023
      • Student Loan Comparison: Federal Loans vs Private Loans
      • Parent PLUS Loans vs Private Student Loans
      • How Does Interest on Student Loans Work?
      • Private Student Loan Cosigner: Everything you Need to Know
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Filing the FAFSA 2023-24: A Simple Guide for Students
      • FAFSA FAQ - Your FAFSA Questions Answered
      • The complete guide to federal undergraduate student loans
      • What are Federal Parent PLUS Loans and How to Apply?
      • Financial Aid for Graduate School
      • Compare Subsidized and Unsubsidized Student Loans
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Best Student Loan Refinance Companies for March 2023
      • Federal Student Loan Repayment Plans
      • Student Loan Forgiveness: How to Get Student Loans Forgiven
      • Repayment Plans for Private Student Loans
      • Should You Refinance Federal Student Loans?
      • Parent PLUS Loan Forgiveness
      • View All Articles >
      • Sallie Mae Student Loan Review
      • College Ave Student Loan Review
      • SoFi Student Loan Review
      • Ascent Student Loan Review
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

    • FAFSA
    • Private Student Loans
    • Federal Student Loans
    • Repay Student Loans
    • Lender Reviews
  • Credit Cards
      • Petal® 2 Visa® Credit Card Review
      • SoFi Credit Card Review
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Best Credit Cards for 2023
      • Best Cash Back Credit Cards
      • Best 0% Introductory APR Credit Cards
      • Best Secured Credit Cards for 2023
      • Best Balance Transfer Credit Cards
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Build Credit?
      • What Age Can You Get a Credit Card?
      • What is a Secured Credit Card?
      • What is an Unsecured Credit Card?
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

    • Card Reviews
    • Best Credit Cards
    • Credit Card FAQs
  • Money Management
      • Best Budgeting Apps
      • Budgeting Tips
      • Budgeting for Beginners
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Financial Goals
      • How to Save Money as a College Student
      • What is an Emergency Fund
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Pay Off Debt
      • Debt Relief
      • What is a Debt Management Plan
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Check Your Credit Score
      • Best Credit Building Apps
      • What is Credit?
      Self Credit Builder: Build Credit. Build Savings. Build Dreams.

      Sponsored Ad

      • Investing for Beginners
      • Best Investment Apps
      • Understanding the Stock Market
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • What is Risk Management
      • How to Prevent Identity Theft
      • What is Insurance
      Info compromised in a breach? Don't compromise on identity theft protection.

      Sponsored Ad

    • Budgeting
    • Saving
    • Debt Management
    • Credit
    • Investing
    • Risk Management
Search Box Form
School Search Form
Advertisement Disclosure
Advertisement Disclosure
×

Edvisors (“Edvisors Network, Inc.”) provides independent advertising-supported platforms for consumers to search compare and apply for private student loans. Loan offers from participating lenders that appear on our websites are not affiliated with any college and/or universities, and there are no colleges and/or universities which endorse Edvisors’ products or services. Lender search results do not constitute an official college preferred lender list. Edvisors receives compensation from lenders that appear on this site. This compensation may impact the placement of where lenders appear on this site, for example, the order in which the lenders appear when included in a list. Not all lenders participate in our sites and lenders that do participate may not offer loans to every school.

Edvisors is not a lender and makes no representations or warranties about your eligibility for a particular loan or financial aid. Lenders are solely responsible for any and all credit decisions, loan approval and rates, terms and other costs of the loan offered and may vary based upon the lender you select. Please check with your school or lender directly for information related to your personal eligibility.

Edvisors has endeavored to provide accurate information. However, the results provided by lenders are for illustrative purposes only and accuracy is not guaranteed, as such, Edvisors assumes no responsibility for errors or omission in the information provided.

×
Get Your Free Guide to Filing the FAFSA Today!

Thank you for your interest in Edvisors' 2020-2021 Guide to Filing the FAFSA.

Please complete the form below to access your free copy.

Thank you! Click here to download your free FAFSA Guide.

I am a:

×
College knowledge starts here!

Enter your email below to receive your Student Loan Handbook from Edvisors.

Please check your email for the Student Loan Handbook.

After Navigation
Home Money Management Credit How to Get Credit
  • Contents
  • What Is Credit
  • Establishing Credit
  • Apply for Secured Credit Card
  • What Is a Credit Score
  • Who Determines Your Credit Score
  • How Do You Get Bad Credit
  • How Do You Get Good Credit
  • What Can You Accomplish With Credit

How to Get Credit

Penny Redlin
By Penny Redlin
November 22, 2022
Email This Article
Fill out the form below to send a copy of this article to your email.
By clicking "Submit" I have read and agree to the Edvisors' Terms of Use and Privacy Policy. We strongly encourage you to read our Privacy Policy to understand how we use and share your information.
A copy of this article has been sent to your email.

Credit is pretty much a mandatory element in today's world. There's not much that you can accomplish without it. Everything from buying vehicles to a residence to business entities revolves around the concept of credit. It's not just creditors who look at your credit, though. Landlords, employers, insurance companies and even cell phone providers examine credit histories before they decide with whom to do business.

What Is Credit

Simply put, credit is the ability to purchase goods or borrow money with the understanding that repayment will come at a later date. It is all very structured, with a credit limit in place, terms of borrowing and precise dates by which payments must be paid.

When you buy something on credit, you're not expected to pay back the amount borrowed right at once. Rather, you get monthly statements with a more manageable amount due. Credit card companies and other lending institutions attach interest rates to any money borrowed. An interest rate is the money the lender charges you to borrow money and is usually expressed as a percentage. Each month, a borrower gets a statement requiring a minimum payment that includes interest, as well as the principal.

Establishing Credit

There are many ways by which to build your credit history. Young people, for instance, often apply for credit cards when they go to college. Often, colleges will host events that allow credit card issuers to meet with students to help them understand the world of credit and to extend them offers. A credit card can be an important asset for a student, helping them to absorb the expenses of the college experience.

When the card issuer offers credit, those credit card accounts depend on different variables. For instance, if it is your first credit card, you could very well have a low credit limit of a few hundred dollars and might also be a secured.

Apply for Secured Credit Card

A secured credit card is one that functions a lot like traditional credit cards and is a great way to starting building credit. One major difference is that with a secured card, you pay a cash security deposit up front to guarantee your credit line. It’s likely you’re your credit limit will match your deposit until you can demonstrate positive spending behaviors and potentially move on to an unsecured credit card.

Generally speaking, an unsecured credit card is a better deal for the consumer. When the card is unsecured, it means that a deposit does not have to be put down as collateral. Most credit cards are unsecured and come with better perks, lower fees and lower interest rates. People with stronger credit scores are more likely to be approved for unsecured credit cards.

What Is a Credit Score

Your credit score is the numerical expression that is based on a person's credit report. The aim of a credit score is to determine a borrower's trustworthiness. It is a three-digit number that ranges from 300 to 850 and that score is the numerical estimation of how likely a borrower is going to pay back money lent.

Those who haven't used credit yet, will not have a credit score. These would be consumers who prefer and are able to pay for everything that they have with their own capital (i.e with cash, check or debit card for example). However, this is fairly uncommon. According to the Consumer Financial Protection Bureau (CFPB), about 26 million American adults are considered to be "credit invisible", meaning they have no credit history.

Your credit score - that magic number that others use to predict whether you'll pay your debts - is divided into several different sections. Each number corresponds with a label. Those labels range from very poor to excellent. The range 300 to 499 is the very bottom of the credit range and people with credit scores within this range are labeled as very poor, meaning that there is great risk involved in lending to them. About five percent of Americans represent this credit score zone.

The poor label corresponds to a score between 500 and 600. About 21 percent of Americans represent this credit zone. Scores between 601 and 660 represent the fair range and about 13 percent of Americans can be found here. They might have higher interest rates when it comes to buying a car, but a score in this range should enable them to secure a loan, which will very much be on the lender's terms.

The good range of credit scores is between 661 and 780 and about 38 percent of Americans that hold credit are in this zone. The excellent credit zone lies between 781 and 850. People with scores above 661 will see more favorable lending conditions.

Who Determines Your Credit Score

There are three main credit bureaus in the United States and they set your credit score, which then affects your ability to borrow money. Indeed, Experian, Equifax and Transunion each have access to all borrowers' credit reports and each bureau has its own precise formula for coming up with your credit score. Depending on which company has formulated your score, it may vary by a few points.

How Do You Get Bad Credit

Bad credit is usually defined as a score lower than 580. Having negative credit means that negative factors appear in your credit history such as a spotty payment history. High debt balances, bankruptcy and previous delinquencies also contribute to a bad credit rating. If you do not pay your bill on time, you're hurting your own credit score, as well as your wallet. Lenders apply extra fees for late payments.

Repairing bad credit is possible and it's as easy as paying your bills on time. Remember that you're not being asked to pay for everything all at once. Even though your score won't leap from poor to excellent overnight, each positive step forward is a way to improve your score. It could take months or years to fully repair a bad credit rating.

How Do You Get Good Credit

Making your payments on time is a great way develop and maintain good credit. Having a balance that doesn't approach the card's limit is another way. Even maintaining employment and a primary residence for more than two years helps, because lenders look at that as a kind of stability that is transferable. One important tool that consumers have is the ability to examine their credit report for free, so that they are better able to figure out how to get, or maintain, good credit. Free credit reports are available every 12-months at annualcreditreport.com.

What Can You Accomplish With Credit

Credit is the key to most everything that's got to do with money in this world. If you have great credit, lenders will bend over backward to loan to you, knowing that they are making a wise investment. If you have poor credit, they will not let you borrow and when they do, they will charge you a lot for the service, knowing that your risky credit history makes you a liability. It's never too early to start thinking about your credit, and by the time college rolls around, you'll want to begin to lay the groundwork for good credit.

 

Get this article in your inbox.
Email This Article

Related Content

Two street signs on atop the other, bad credit and good credit - pointing in different directions
What is Credit
By Ainsley Rindfleisch
11/07/2022
Credit is a written agreement where one party (the borrower) borrows money from another party (the lender) with the understanding that the borrowed money will be paid back at a later date, typically with interest.
Read More
Types of Credit
By Ainsley Rindfleisch
11/22/2022
Having credit means that a lender has approved you and given you permission to borrow money from them that you're required to pay back, with interest, in the future.
Read More
Laptop displaying a credit score of 751 which is good credit
How to Check Your Credit Score
By Penny Redlin
10/26/2022
Checking your credit score is a relatively easy thing to do.  Without having to go too far, you can check your credit card or loan statement.  Many credit card companies and lenders have begun to add your credit score to your statement for your reference. 
Read More
Two street signs on atop the other, bad credit and good credit - pointing in different directions
What is Credit
By Ainsley Rindfleisch
11/07/2022
Credit is a written agreement where one party (the borrower) borrows money from another party (the lender) with the understanding that the borrowed money will be paid back at a later date, typically with interest.
Read More
Types of Credit
By Ainsley Rindfleisch
11/22/2022
Having credit means that a lender has approved you and given you permission to borrow money from them that you're required to pay back, with interest, in the future.
Read More
Laptop displaying a credit score of 751 which is good credit
How to Check Your Credit Score
By Penny Redlin
10/26/2022
Checking your credit score is a relatively easy thing to do.  Without having to go too far, you can check your credit card or loan statement.  Many credit card companies and lenders have begun to add your credit score to your statement for your reference. 
Read More
Could You Be Saving More?
Subscribe to Edvisors' Student LIFE Newsletter to receive up-to-date financial aid information and advice, explore scholarship opportunities, loan repayment options, and learn expert strategies on how to plan and pay for college.
Newsletter Form
By clicking "Subscribe" I have read and agree to the Edvisors' Terms of Use and Privacy Policy. We strongly encourage you to read our Privacy Policy to understand how we use and share your information.
Thank you for subscribing to our newsletter.
We care about your privacy

This website uses cookies to offer you the most relevant marketing and targeted advertisements.  These cookies can collect information to personalize your experience and in some states are considered a sale of your personal information. You may exercise your right to opt out by clicking on deny cookies.  If you opt out, we or our partners will not be able to provide you with personalized ads and we will not provide your personal information to any third parties.   Please accept cookies for the optimal experience.  You can withdraw or modify your consent for non-essential cookies at any time by visiting Cookie Preference page.

Ask the Edvisor
Blog
Contact Us
Edvisors in the News
Link to Us
Newsletter
Partners
Press
Student Aid FAQ
Testimonials
Tools and Calculators
About Edvisors
Video Resources
Financial Terms Glossary
Accessibility Statement
Sitemap
Disclaimer
Notice of Collection
Interest-Based Ads
Cookie Settings
Privacy
Terms of Use
Your Opt-out Rights
Your Privacy Choices Privacy Options

Better Business Bureau logo

Edvisors provides expert advice on planning and paying for college. On Edvisors.com easily compare student loan lenders, learn how to apply for financial aid, and discover scholarships. Learn about federal and private student loans for students and parents, how and when to apply to college, and more!

Edvisors (“Edvisors Network, Inc.”) provides independent advertising-supported platforms for consumers to search compare and apply for private student loans. Loan offers from participating lenders that appear on our websites are not affiliated with any college and/or universities, and there are no colleges and/or universities which endorse Edvisors’ products or services. Lender search results do not constitute an official college preferred lender list. Edvisors receives compensation from lenders that appear on this site. This compensation may impact the placement of where lenders appear on this site, for example, the order in which the lenders appear when included in a list. Not all lenders participate in our sites and lenders that do participate may not offer loans to every school.

Edvisors is not a lender and makes no representations or warranties about your eligibility for a particular loan or financial aid. Lenders are solely responsible for any and all credit decisions, loan approval and rates, terms and other costs of the loan offered and may vary based upon the lender you select. Please check with your school or lender directly for information related to your personal eligibility.

Edvisors has endeavored to provide accurate information. However, the results provided by lenders are for illustrative purposes only and accuracy is not guaranteed, as such, Edvisors assumes no responsibility for errors or omission in the information provided.

Copyright © 1998-2023 by Edvisors Network, Inc. All rights reserved.

All other trademarks and service marks displayed on Edvisors Network, Inc. websites are the property of their respective owners.

Edvisors Network, Inc. 350 S. Rampart Blvd, Suite 200, Las Vegas, NV 89145

Copyright © 2023 by Edvisors.com. All rights reserved.

×
You Got In - Now How Do You Pay for It?

Get the money you need from leading lenders

1 Pick Your College
2 View Your Options
3 Click to Apply
Exit Modal

PrivateStudentLoans.com recommends you consider all financial aid alternatives including grants, scholarships and federal loans (Federal Stafford, Federal Parent PLUS, Federal Grad PLUS) prior to applying for private student loans.