Posted by Maneesh Sethi :: June 29, 2007 @ 10:59 am

Credit card debt is a double-negative. It makes you pay more for something you bought because of interest. It also seriously hurts your credit score.

I’ve tried talking about credit to my friends at school. College students seem not to care about credit because it doesn’t affect them right now. A few years down the line, when they try to buy a house, that’s when they will realize the benefits. Let’s look at why you should establish good credit.

Because you want to have somewhere to live

Landlords are going to trust a credit report more than they will trust your promises to pay on time. Credit problems from the past can definitely influence whether or not a landlord will give you a place to stay.

Think about it: if you had to rent out a house and your choice for the tenant was between someone with a perfect history of paying bills on time and someone who couldn’t make payments on the ridiculous number of 5-5-5 Domino’s pizza deals he bought in college, who would you pick?

Because you want a job

Employers sometimes request credit reports during the hiring process. Credit reports help employers judge the trustworthiness of their potential hires. If you can’t pay your bills on time, can you finish your projects on time? Even if your habits since college have changed, your credit score doesn’t move at the same speed as your maturity.

Because you need a car (to impress the ladies)

Your credit score can determine the interest rate on your car loan. If you have a bad credit score, you will get a bad interest rate on your loan. In addition to your credit card debt, your car payments will be higher.

Disregarding your credit just because you are young is a mistake. Credit problems at any age will hound you for a long time. It is much easier to maintain good credit than to improve on bad credit. How much harder is it to increase your GPA than maintain it? In the same way, protect your credit.