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What It Really Means to Have Good Credit As An Undergrad College Student

by Larry Chiang on August 7, 2013

By Larry Chiang 


As a college student, our credit report is essentially our high school grades transcript or 2-year, running report card.


Future employers, internship givers and student loan refinanciers use your credit report. Of course future landlords check your credit.


Did you know car insurance companies check your credit??!? Did you know you’re much more likely to crash your car or burn your own house down if you have bad credit. Fire insurance companies see bad credit as a fire insurance underwriting criteria. Car insurance claims for people with bad credit are higher.


As an incoming freshman, you have the opportunity to write what you want into your financial report card. I will break down the technique of inserting the equivalent of 24 As into your credit score transcript. I will use the next five sections to tactically explain this ’24 A’s’  method— it’s 24 1’s (1’s are an on time payment 🙂


Here are the five most important things that make up our future credit card credit score NOTE: THE SUPER MAJORITY IS SUPER EASY TO DO BUT IT IS EASIER NOT TO DO IT.


Larry Chiang says, “Payment History is effen 45 percent”

Everyone knows paying your bills on time helps your credit score. Most of humanity thinks:  if I don’t owe and don’t pay late… I get good credit.

This is wrong. 

It is a credit urban myth that abstaining from owing builds credit score.


Payment history is significant

Here is how to nab the majority 45%: charge 20.oo / month

PAY OFF ALL $20.oo per month. Do this for 24 months on-time in a row (1’s are credit code ON TIME PAYMENT :-).

Payment history is INCREDIBLY significant

We should focus our effort to get 24 1’s (1’s are like As on our credit transcript) Note: if you owe small amounts and pay small amounts, you build payment history)

Majority of college students forget a month or 5, so they don’t owe twenty and pay twenty. When you don’t owe, you get a credit code “X”. This means non interaction and does not build payment history

Remember payment history is 45% of our credit card, credit score.

This leads directly into…

Length of credit history is 26 percent of your FICO credit score

As a college student, I wanted to get my credit looking as if I was already 30.

Money is a wonderful servant but a horrible master. Length of credit history might seem like the last section, “payment history”. It’s cuz it is.

Please join me on the right side of the interest rate equation. You are either paying interest or getting paid interest. The correct side is to not pay interest. It’s the largest expense in our lives, interest is.

Pay way less interest because 71% of your credit score is based on getting your first 24 on time payments on-time and in a row


Level of debt: 16 percent


Types of credit: 7 percent

Credit inquiries: 6 percent

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