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How Good Credit Benefits Your Post-College Life

Published January 15, 2025
7 min read
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Key Points:

  1. A good credit history and a high credit score can make a difference in getting a good job and accessing the housing you want.

  2. Higher credit scores could mean lower interest rates on loans and credit cards.

  3. Your credit history plays a role in utilities that require deposits.

Graduating from college is an exciting time filled with transitions. For many, it means being self-sufficient and not relying on parents for financial support. It could be the beginning of building credit. Did you know that your credit history and credit score will be an important factor in achieving new milestones?

What is a credit score and credit report? Your credit score and credit report are related, but not quite the same thing. Your score quantifies your credit risk into a three-digit number. Your report, on the other hand, provides the data that informs your score.

Key benefits of good credit after college

What can you do with good credit? A good credit history and a high credit score from a major credit bureau opens a lot of doors. From getting a good job (with your permission, some employers run your credit history) to accessing safe housing, your credit history plays an important role in your day-to-day life.

 

While having no credit history isn’t the same thing as having poor credit, a lack of credit history or a low credit score can affect your ability to buy a car or rent an apartment. Many college students start building credit by getting a student credit card. Student cards typically have low limits and come with rewards programs that may help students earn rewards on their everyday purchases.

Seamless apartment hunting

Are you searching for the best apartment or rental home? Right size, right cost, right location—there’s a lot to consider when renting. Once you find the right spot, you’re thrown a curveball: the landlord needs to run your credit history.

 

While most landlords don’t report your payments to credit bureaus, they often rely on your credit history to evaluate if you’re likely to pay your rent on time or miss any payments. Having a track record of missing payments may mean you’re asked to pay an extra deposit. It could also mean you have to pay an extra month’s rent upfront. The worst case if you have poor or bad credit is that the landlord doesn’t approve your application at all.

 

In short, the benefits of good credit can help you sail through the rental approval process and even save you money on deposits.

Check your credit score first and correct any errors. You can get one free credit report from each of the three major credit bureaus every 12 months. As a Discover® Cardmember, you can get your free Credit Scorecard with your FICO® Score and more.1

Utility services without the extra cost

Do you need credit to get a phone plan? What about your gas, electricity, or water? When a credit issuer like a utility company is deciding whether to offer you a credit line, they look at your payment history to see if you’re likely to pay them back. Having good credit can help.

 

Utility companies may waive deposit requirements for customers with good credit. While there’s no rule for how much companies can charge as a deposit, it could be several hundred dollars depending on your credit score according to the City of Morganton, North Carolina.

 

When you graduate college with an established and good credit history, this could add convenience and savings as you set up your post-college home.

Did you know?

Discover® student credit cards let you earn cash back rewards while you're in college and can help you build your credit with responsible use.2

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Simplify car purchases

The benefits of having a good credit score are unmistakable when purchasing a car. After you’ve done all the research on a price and model that works best for you, financing is your next step.

 

Good credit offers better financing options for auto loans. Your credit score is a factor in the interest rate you qualify for, and ultimately how much you’ll pay over the life of the loan. For example, lenders consider someone with a good credit score less risky to lend to, so higher credit scores tend to come with lower interest rates.

Better terms on loans and credit cards

When you graduate college, you might be looking for a personal loan or credit card. Like auto financing, companies that offer personal loans and credit card issuers will run a hard inquiry into your credit history and credit score. When your credit issuer does a credit check, the benefits of having good credit will play a crucial role in getting approved and what your interest rate will be.

 

One of the best ways to save on a loan or credit card is to have lower interest rates, meaning you’ll spend less over the life of the loan. Conversely, having bad credit or a poor credit score could mean you’ll pay higher than average interest rates. There’s no federal limit to the APR a credit card can charge. There may only be a maximum credit card interest rate if the state where the credit card was issued has a limit for credit card interest rates.

You can estimate what you’ll pay each month for a personal loan at Discover by using a monthly payment estimator. Just plug in the loan amount, loan term (how many months until you will pay off the loan), and your credit score. Note that your Discover APR will be between 6.99% and 24.99% APR based upon creditworthiness at time of application.

 

For your credit card debt, you can use the Discover® Credit Card Interest Calculator to find out how long it will take you to pay off credit card debt with interest fees.

Did you know?

You can start your credit journey while you’re still in college. There is no credit score required to apply for Discover Student credit cards.3

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Having a good credit score can also aid in getting a higher credit limit or personal loan amount. It can also open credit card offers that give you rewards for purchases you make.

Streamline the home-buying process

Buying a home is probably the biggest purchase you’ll ever make. Having good credit is important for qualifying for a home loan (also called a mortgage) with competitive rates and terms.

Before you even begin searching for properties, you’ll want to know how much you can afford to pay each month, which will tell you how much of a loan to ask for. If you have excellent credit, you might find you are approved for more than you can afford to pay each month, so keep that in mind as you budget your new mortgage. (Don't forget to factor in other bills, like your student loan payments, to your monthly budget when looking for the best home loan.)

Having good credit leads to lower rates. The lower your interest rate, the less you’ll pay over the life of your home loan. In general, the factors that go into your loan approval and assigned interest rate include your credit report, credit history with that lender (if you have one), your current debt (credit utilization ratio) how much cash you have saved, what your total assets are, and finally your current income.

Unlock employment opportunities

Do employers check your credit report? Some do, especially if you’re looking for work in the financial sector or for a role with financial responsibility. Employers need to know if you’re trustworthy or a risk.

 

Making payments on time can translate to meeting your work deadlines, and low debt could mean you’ll be responsible with company finances. In this case, the benefits of good credit could mean the difference between you getting a job offer or not.

Your credit history and credit score appear in many aspects of your financial life. Be prepared and run your credit report and know your credit score so you can fix any errors and rebuild poor marks as needed.

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  1. FICO® Credit Score Terms: Your FICO® Credit Score, key factors and other credit information are based on data from TransUnion® and may be different from other credit scores and other credit information provided by different bureaus. This information is intended for and only provided to Primary account holders who have an available score. See Discover.com/FICO about the availability of your score. Your score, key factors and other credit information are available on Discover.com and cardmembers are also provided a score on statements. Customers will see up to a year of recent scores online. Discover and other lenders may use different inputs, such as FICO® Credit Scores, other credit scores and more information in credit decisions. This benefit may change or end in the future. FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.

    Discover Financial Services and Fair Isaac are not credit repair organizations as defined under federal law or state law, including the Credit Repair Organizations Act. Discover Financial Services and Fair Isaac do not provide “credit repair” services or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating.

  2. Build credit with responsible use(Student): Discover reports your credit history to the three major credit bureaus so it can help build your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build credit.

  3. No Credit Score Required to Apply (Student): Based on the preceding 12 months of Discover Student credit card application data, applicants without a credit score may qualify. You must meet other applicable underwriting criteria. When we evaluate your creditworthiness, we consider all the information you provide on your application, your credit report, and other information. If you have a credit score, we may use that in our evaluation. Not having a credit record may impact your approval odds.

  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.