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Having a good credit score may not be at the top of every college student’s mind, but your credit score matters during your college years and beyond. Having a higher credit score generally means you’re less of a risk for lenders, and you could potentially qualify for more favorable interest rates. But if you have a less than desirable credit score, it could affect your ability to rent an apartment, take out a loan or even get a cellphone plan.

Below, we look at five reasons why college students need a good credit score to help them secure everything from an apartment to a car.

1. Renting an Apartment

young couple renting first apartment

If you plan to live off campus at any point during your college years, you may need a good credit score to rent an apartment. Nearly all landlords and property management companies run a credit check on prospective tenants. By checking your credit report, landlords can determine your likelihood of paying your rent on time, as well as check for past collections, loan defaults and late payments. 

While there’s no minimum credit score requirement to rent an apartment, the score you need may depend on the city, neighborhood and the policy of the landlord or property manager.

2. Getting an Auto Loan and Insurance

More than 85% of college students commute to campus. If you aren’t going to walk to campus or take public transportation, you need a car.

There’s no minimum credit score requirement to get an auto loan, but it does determine what interest rate you may qualify for and what lenders may be willing to work with you. While you could get around this by purchasing a car with cash instead of taking out a loan, you still need car insurance.

Your credit score may influence the rate you pay for car insurance. According to a nationwide analysis of top insurers, poor credit could almost double your insurance premium. The higher your credit score, the better the rate.

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3. Signing Up for a Phone Plan

close up of people using mobile phone

Unless you’re staying on a family plan, you need a good credit score to get a cellphone plan. Today, most wireless carriers run a credit check to evaluate your risk before you sign a new service contract. 

According to TransUnion, one of the three main credit bureaus, more retailers are turning to credit checks for new customers to determine whether they're likely to pay their phone bills on time each month. That is largely due to customers’ costs being spread out over several months, reduced payments from phone makers and the expectation that most customers can't pay the full cost up front. 

4. Applying for a Job

Having a good credit score isn’t necessarily a prerequisite for getting a job, but depending on where you live, future employers could check your credit report (with your written permission) when applying for a new job. Although they won’t see your credit score, employers can look over your credit history to assess your general money management skills, the possibility of security threats and financial responsibility.

You can still get a job with bad credit, but you could be denied certain positions within the company based on your credit history, such as a managerial role or a position that requires a security clearance.

5. Refinancing Private Student Loans

If you want to refinance your federal or private student loans, then having a good credit score is essential. Experian says a credit score of at least 670 will greatly improve your chances of qualifying for a more favorable interest rate. However, each lender has its own set of eligibility criteria.

While it’s possible to refinance with a lower credit score, you could end up paying a higher interest rate on your student loans. A higher interest rate could mean paying more over the life of the loan, as well as a higher monthly payment. 

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Josephine Nesbit

Josephine Nesbit is a real estate and finance writer from New England and is currently based out of the Midwest. She has experience writing about real estate market trends, mortgages, real estate investing, debt, saving money, student loans and more. Her work has appeared in several publications, including Fox Business, GOBankingRates, Bankrate and U.S. News & World Report. When she’s not working on her freelance writing business, she’s outside spending time with her three young children. You can visit her website here or connect with her on LinkedIn to learn more about her.