What I Wish I Knew About Credit Scores Before Age 25

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I don’t think I even know what a credit score was before I was 25. This is a good thing, because before then, I’m sure my credit score wasn’t any good.

I remember one time I closed an account with my cellphone provider, and my last bill never actually found its way to me when I moved that same month. But seven months later, a collections agency did. I had been chased across state borders from Utah to Arizona, for an unpaid $18 that had ballooned to $62 with interest and penalties. I paid it off and never thought about it again.

For the next few years, I didn’t know why every credit card I applied for was declined. My “credit score” was a vague number the banks knew about me but I didn’t. This was 15 years ago when the only way to check your credit score was to fill out a form, pay a fee, and then mail it in and wait to hear where you stood. I never bothered.

I wish it had been as easy to check my credit score then as it is now

Now I get my credit score and credit report emailed to me every month. An unpaid bill never makes it to collections firstly because I know to check on closed accounts now, but also because my credit report would alert me that something’s up long before.

Borrowell credit score

If I had been able to easily check my credit score when I was young, I would have been able to do a better job at taking care of it. I wouldn’t have received one denied credit card application after another with no idea how to fix it. Instead, I’d know exactly where I was going wrong and how to change it.

It took more than 2 years for the bank to finally extend me credit

Eventually, a bank let me have a secured credit card for $500. I used it responsibly enough that before a year had passed, they’d given me back my $500 security deposit and upped my limit to $1,000. I finally had real credit!

I still wasn’t watching my credit score, but if I had to guess, I’m sure it was bouncing all over the place. My credit limit wasn’t very high, so I lived near the edge of it. For a few years, the balance rarely dipped below $800. My credit utilization was way too high, but because I never checked my credit score I had no idea.

When I started to take out student loans for university, my bank also extended me a $16,000 line of credit. I could have ended up in a world of trouble with debt, but by my third year of my four-year degree I took an important step: I finally checked my credit report.

My credit report was one of my first steps to financial responsibility

I still didn’t know my credit score. You could get your credit report for free once per year from one of the credit bureaus, but knowing your actual score cost money I didn’t have as a broke post-secondary student.

My credit report was invaluable though. I knew every loan and credit card in my name. It also told me about any inquiries to my credit report, as well as listed my cellphone and utility accounts. Because I was still in school, none of my loans were in repayment yet but I felt great knowing exactly where I stood.

It was reassuring to know there was nothing that could surprise me after graduation. There were no misplaced student loans or department store credit cards quietly incurring interest while I studied for finals. Despite my negative net worth, I felt financially empowered. I had lots of debt, but I was completely in control of it.

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Checking my credit report saved me credit card fraud multiple times

I was diligent about checking my credit report once or twice per year after that. Doing so helped me avoid some major financial mishaps that could have thrown me wildly off course.

I had an unauthorized credit card opened in my name twice. Another time, an existing card was used for a shopping spree at a Nordstrom in Ohio. Regularly checking my credit report both alerted me to incidences of fraud and helped me identify and close the accounts before further damage was done.

I was lucky I was watching this aspect of my finances for most of my twenties. It spared me a lot of headache and unexpected bills!

Borrowell credit score

And knowing my credit score has helped me plan for major purchases

Once Borrowell offered both free credit reports and credit scores, I signed up instantly. It was the first time I ever checked my credit score, and guess what?

It was good!

All those years of monitoring my credit report, paying of my debts, ensuring accounts were closed when paid off, and keeping fraudsters away left me with a stellar credit record. The 18-year-old with cellphone bills in collections was long gone. I’ve only known “excellent” credit ever since.

When it comes to your money, knowing and tracking your credit score is an essential metric of your financial health. It’s designed to communicate to lenders how reliable you are as a borrower, but it also communicates to you how well you’re doing managing your financial obligations.

Regularly checking your credit score and credit report is one of the best ways to monitor your progress towards your financial goals, namely getting to debt-free! You can get your credit report and updated credit score emailed to you each month from Borrowell.

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About Author

Student debt killer, super saver, and stock market addict. BSc. in Chemistry from the University of Alberta, MBA in Finance from the University of Calgary. CEO x 2 and MOM x 1. Currently residing in Calgary, Alberta, Canada, but hooked on travelling.

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