I went to college in the early-to-mid 2000s, and I’m sure this sounds familiar to a lot of you. Tables would pop up around the campus with all sorts of goodies displayed to attract students. Once you saw those free t-shirts, frisbees or cups, you would do whatever was necessary to get ahold of them!

As you might imagine, these tables were hocking credit card applications. If you signed up for one or two applications, they’d give you your choice of “prizes” AKA cheap crap. These were especially targeted at freshmen, who at 18 years old are making their first financial decisions on their own. Most of us never expected to be approved for these credit cards, so what was the harm? For me, not only was there no harm, but there was a huge benefit.

The card I never received

Apparently, I was approved on one of these credit card applications. The funny thing is, I never received an approval letter nor the credit card itself. I never knew about the card until after I graduated and moved 1,000 miles away.

The card itself was a typical starter card for students. It had a credit limit of $500, so the student couldn’t get into too much trouble before maxing it out. Attempting to entice me to use the card, the card issuer increased my credit limit, two times! I graduated in 2005 with a card on my credit report with 0% utilization, $2,000 credit limit and no late payments! I looked like a model borrower, ignoring for a second that I never actually received the card.

Second part of good credit score

Another big impact on my overall credit score was built up from my use of Direct Student Loans. These were separated between subsidized and unsubsidized loans from the US Department of Education. It wasn’t because these loans were “good debt” but they were a different type of credit. A mix of credit available to a borrower helps boost the credit score.

I had also consolidated my student loans before graduation so I could lock in a rate of 2.875%. This made it seem like I had already paid off a loan, even though a new one opened in the same amount of student debt.

The discovery

Once I graduated from college, I moved to Florida two days later. I would have moved the next day, but that was Mother’s Day. My family also held a graduation party/send-off for my move over 1,000 miles away to Florida.

I lived in the dorms all 4 years of college, so I didn’t have any furniture or mattress to bring with me. We stopped at one furniture store and bought an overstock mattress for $250. Then we stopped at a fancier nearby furniture store to look at couches and tables for my first apartment. Up on the second floor, I noticed a set of overstuffed, oversized couches and a big chair. I’m 6’5” so I plopped down and immediately declared the big chair the “Josh-sized chair.” The rest of my family kept wandering around the store, but I really had my heart set on this furniture. The salesman told me the model was being discontinued and they needed to sell the floor model. They would give me 40% off the sticker price and free delivery! I said I’ll take it!

Oversized, overstuffed loveseat and couch

But then came the heart-wrenching 45-minute wait. We all sat down on my new furniture and waited up on the second floor. No sales people came back to talk to us, and we couldn’t figure out what was causing the delay. Finally, we decided to walk downstairs and see if we could sort out the problem. Turns out, there was no problem at all, but they had run my credit 4 times. The Manager just couldn’t believe a 22-year-old kid, 3 days out of college, had an 800 credit score. Their financing arm approved me for a $15,000 credit limit and I’d never made a “real” paycheck in my life! The financing was 180 days “same as cash.” That allowed me to slowly pay off the ~$4,000 in furniture I bought that day, interest-free.

Components of a credit score

A FICO credit score is made up of 5 parts.

  1. The largest, at 35%, is based on your payment history. As I described above, my payment history was spotless, mostly because I never held the card.
  2. Up next, at 30%, is credit utilization. Again, I never had access to use the card, so my credit card utilization was 0%. I had student loans, but those balances were decreasing.
  3. 15% of your score is based on length of credit. I was only 22 years old, but I had nearly 4 years of credit history from that card application freshman year.
  4. 10% is based on new credit. I hadn’t opened any new credit cards in years.
  5. Credit mix makes up the last 10%. As stated, I had a credit card and 2 student loans. This could have been a bit better if I’d had a car loan. But overall, that is a good mix for a 22 year-old.

Looking at those 5 factors, it’s no wonder I had a high credit score. The two weak spots were age of credit and mix of credit.

What’s your first memory of your credit score? Do you have any good or bad stories to share? Let’s hear about them in the comments!

  1. I’m at the point where I’m right around 800, so I’m pretty happy with my score. It’d be even higher but I opened two new credit cards within the past year so that’s dinging me. But I’m coming up on a year of having had the Citi Double Cash Card (loooooove it!) so that should change pretty soon. I consider myself to have lucked into a good score because I’ve never put any effort into building mine. I just practice good habits of paying in full, and keeping a relatively low balance.

    1. I do feel a little bad that I lucked into mine, while some people struggle for years with low credit scores, limited access to credit, or they pay exorbitant rates because they don’t have the years of credit history that I fell into.

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