What Is Credit and Why Does It Matter?
Credit allows you to borrow money with the agreement that you’ll repay it later, often with interest.
Using credit wisely over time helps you build a positive credit history and a strong credit score.
A higher credit score can:
- Help you qualify for lower, more competitive interest rates
- Make it easier to buy or rent a home
- Improve your chances of being approved for an auto loan or other lines of credit
- Reduce or eliminate utility deposits
- Strengthen your application for some jobs that require credit checks as part of the hiring process
Responsible credit use isn’t about taking on debt—it’s about showing you can manage payments, balances, and accounts over time.
Getting Started: Prospective Students & Families
If you’re new to credit, a few early steps can help you begin building a healthy credit history:
- Become an authorized user on a parent or guardian’s credit card (if they have strong credit).
- Explore beginner credit options, such as:
- Student credit cards
- Secured credit cards through a bank or credit union
These tools help you start establishing a record of on-time payments—one of the most important factors in your credit score.
Building Credit as a Student
The sooner you begin forming good financial habits, the stronger your credit profile will become. Understanding what affects your credit score can help you make informed decisions.
What Makes Up Your Credit Score?
- 35% — Payment History
- Whether you pay bills and loans on time.
- 30% — Amounts Owed (Credit Utilization)
- How much of your available credit you’re using. Lower utilization is better.
- 15% — Length of Credit History
- How long your accounts have been open.
- 10% — New Credit
- How often you apply for or open new credit accounts.
- 10% — Types of Credit
- Your mix of credit accounts—such as credit cards, auto loans, and student loans.
Credit is a tool. Applying for credit and carrying a balance does not automatically mean you’re using it poorly—what matters is whether you can manage and repay it consistently.
Graduating Students & Recent Alumni: Why Credit Still Matters
As you transition into life after college, strong credit becomes even more helpful. A solid credit history can support your plans by improving your access to:
- Competitive interest rates on loans
- Rental or home-buying opportunities
- Auto financing
- Personal loans or credit lines
- Employment opportunities where background checks include credit reports
Establishing your credit early makes these transitions smoother and more affordable.
How We Can Help
Center for Financial Wellness (CFW): Schedule a free, confidential appointment to discuss credit building or review your credit report.
Digital Resources
Access a range of online tools and resources to help you manage your money, plan for the future, and navigate key financial decisions.
Annual Credit Report
You can access a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) every year at annualcreditreport.com.
CashCourse
Why CashCourse Matters
- Build confidence managing everyday finances
- Understand student loans and repayment options
- Learn how to build and monitor credit
- Recognize and avoid fraud and identity theft
CashCourse Highlights
- Budgeting & Spending: Track expenses and plan ahead with practical tools.
- Student Loans: Explore repayment options and model forgiveness scenarios.
- Credit Basics: Learn how to build and maintain strong credit.
- Fraud & Identity Protection: Identify scams and safeguard your financial information.
How to Register
- Visit CashCourse.org
- Select Register Now!
- Enter UT’s access code: 9595
- Verify your account and create a username
- Select Let’s Get Started
GradReady
What GradReady Helps You Do
- What GradReady Helps You Do
- Consolidate federal and private loans in one place
- Build a personalized budget
- Access tools such as budget planners and investment calculators
New Users
- Visit GradReady and select Get Started
- Register using your @vols.utk.edu email address and UT enrollment information
- Complete your setup until you land on the Success! Page
Returning Users
- Visit GradReady
- Log in with your @vols.utk.edu credentials
