A credit score is a three-digit number that determines how well or how poorly a person has been in dealing with their finances, and whether they are a risk to financial obligations. Credit scores are based on several factors, such as the number of bank accounts one owns, payment history and how much money is owed between them. Most of how credit is determined is measured on payment alone.

It is astonishing at how something as vital as credit scores are rarely, if ever, explained in detail in high school, considering that many high school students often have their own credit cards at this point. The most important aspect of being educated about credit scores is that this information will aid students later in life when it comes time for them to make important purchases, such as with buying their own vehicles or homes. It is also important because when being issued a credit card, there are certain activities that will affect credit scores in the long run. For example, spending large amounts of money shopping and not paying it back on time negatively affects a credit score, and does the most damage. Maxing out credit cards is another activity that will hurt a credit score, as will using large amounts of available credit over time.

On the other end, being able to pay bills on time and in full positively helps a credit score. Having a steady and constant employment is another factor that increases your credit score, because it shows that one is more likely to be able to pay their bills on time. These facts are important to know because having a higher or lower credit score will impact your ability to make certain hefty purchases. For instance, having a low credit score will make the task of having to buy a car more difficult because the paying rates will increase due to bad credit. In some cases buying a car may even be impossible because some dealers will see this person as a financial risk and can refuse to sell to people who have outstandingly bad credit. Needless to say, people who pay their bills on time and don’t have excessive credit cards will have an easier time making purchases such as these.

Credit scores may never be discussed in high school because some would argue that this subject would be dealt with at the college level. Regardless, the importance of knowing about credit scores is key for success in the current world.