If you’re a college student, you’re probably working hard to keep your grade-point average looking sharp. After all, your GPA could be your ticket to graduate school, a competitive internship or maybe even your dream job.
But if you’re hitting the books so hard that you’re ignoring another important number — your credit score — you could be making a huge mistake. It might be hard to believe, but your three-digit credit score is actually more important than your GPA. Not sure why? Check out the five reasons below.
1. It determines the cost of future purchases.
It’s true that your GPA could determine certain aspects of your future, but your credit score is guaranteed to influence one thing — the cost of the big purchases you’re going to make after graduation.
Lenders and insurance agents (among others) look at your credit score when they’re figuring out how to price the products they’re selling you. For instance, when you apply for your first car loan, the bank you’re working with will run a credit check to decide how much to charge you in interest on the auto note. A low credit score will mean paying a much higher interest rate. This, of course, will make the cost of the loan higher overall.
A high GPA might open the door to academic opportunities, but a high credit score will keep more cash in your wallet. This is much more important once you’ve left school behind.
2. Once your score goes south, it takes longer to improve.
A bad semester could have a negative impact on your GPA, which is certainly stressful. But it’s relatively easy to revive your average the following term if you buckle down and study hard. In other words, a few bad moves can be corrected pretty quickly.
Not so with your credit score. Messing up just once could result in a serious loss of points that will take a long time to correct. For instance, if you don’t pay a bill and it goes into collections, you’ll lose a lot of points from your credit score — perhaps as many as 100. But there’s no extra credit or big exam to ace that will help you get these points back quickly. You’ll have to demonstrate years of positive payment history to get your score back to good form.
We’re certainly not suggesting you should take your GPA lightly, but it’s important to remember that your credit score is less forgiving — this is why prioritizing it is a smart long-term move.
3. It’s almost impossible to put a bad score behind you.
When you’re an undergraduate student, it’s hard to think about much else beyond your four years in school. But there is a wide world out there beyond your bachelor’s degree, and within a few years of graduation, your GPA loses a lot of its importance. Pretty soon, potential employers will be much more interested in your past job performance than how you did in your freshman English course.
But your credit score will follow you everywhere you go for the rest of your adult life. Since it’s checked under so many circumstances, there’s no point in time when it will stop mattering the way your GPA probably will. You’ll need it, and need it to be good, for as long as you’re participating in the financial system.
Again, this goes to show that the importance of working toward good credit might be slightly greater than the importance of working toward good grades.
4. It will influence your ability to find a place to live.
When it comes to basic human needs, shelter is at the top of the list. Your GPA isn’t going to be very helpful when it comes to finding a decent place to live, but a good credit score certainly will be.
This is because most landlords will check your credit score as part of the rental application process, and many simply won’t accept tenants with bad scores. Of course, the same is true if you’re thinking of buying a home. If you don’t have good credit, qualifying for a mortgage will be nearly impossible.
So no matter what, building and maintaining good credit will affect your ability to find housing. This reality alone should convince you that it’s at least a little more important than your grades.
5. It could put a crimp in your romantic relationships.
It might seem strange, but your credit score could have an impact on your dating life. According to a 2014 NerdWallet analysis, more than half of single adults over age 25 are “somewhat less likely” or “much less likely” to date someone with bad credit.
Unless you’re habitually dating pretentious people, it’s highly unlikely that your GPA will be considered a deal breaker by potential mates. But most young adults realize that a significant other with bad credit might come with financial baggage and don’t want to get serious with someone who might hold them back. So once again, credit score trumps GPA in terms of long-term importance.
Final words of advice: Since having good credit is a bigger deal than you thought, you’re probably wondering how you can improve yours. Here are a few tips:
— Pay your bills on time.
— Avoid credit card debt, and avoid maxing out a credit card.
— Start establishing a credit history as soon as you can. The easiest way to do this is by getting a credit card early and using it responsibly.
— Don’t apply for too much credit at once.
— Check your credit reports at least once per year. if you spot a mistake, have it corrected as soon as you can.
If you follow these tips, you’ll be on your way to a bright future — academically and financially, of course!
More from U.S. News
12 Simple Ways to Raise Your Credit Score
How Student Loans Affect Your Credit Score
Credit Scores 101: A Guide to Your Credit History
5 Reasons Your Credit Score Is More Important Than Your GPA originally appeared on usnews.com
