What’s your credit, and why does it matter?
When people talk about your credit, they mean your credit history. Your credit history describes how you use money. For example:
- How many credit cards do you have?
- How many loans do you have?
- Do you pay your bills on time, or are you late on payments?
How you’ve handled your money and bills in the past helps lenders decide if they want to do business with you. Your credit history also helps them determine what interest rate to charge you.
Starting July 1, 2026 with the federal student aid changes, new students will need to rely more heavily on alternative loans through private lenders to fund their education.
Having good credit and actively monitoring it is critical when it comes to private education loans. Private lenders often base approvals, interest rates, co-signer requirements, and repayment terms in part on the borrower’s credit score.
Find out what your credit history looks like by checking your credit report.
How do you know if your credit is good?
“Good” or “bad” credit is based on your credit history. You probably have “good” credit if your credit history shows that you paid your bills on time and didn’t borrow more than you could afford to pay back
You might have "bad" credit if your credit history shows few or no bills paid back, that you paid your bills late, or that you couldn't afford to pay back the full amount you borrowed.
Check your credit history now and monitor it closely. If there are items on your history that reflect negatively, it may be beneficial to work through resolving those items now to improve changes of being approved for alternative loan funding.
What’s in your credit report?
Your credit report is a summary of your credit history. The three nationwide credit bureaus — TransUnion, Equifax, and Experian — collect credit and other information about you. In your credit report, you’ll find information like:
- Your name, address, and Social Security number
- Your credit cards
- Your loans
- How much money you owe
- If you pay your bills on time or late
- If you filed for bankruptcy
Check your credit report regularly to be sure the right information is there. If you find mistakes, dispute them.