Being accepted into college is exciting. Finishing high school and entering a new stage of life is something worth celebrating.

But if you didn’t get a scholarship, your parents were unable to foot the massive bill, or your financial aid award wasn’t enough to pay for tuition and room and board, you probably had no choice but to turn to federal or private student loans.

Students loans, which can come from private sources or the federal government, are loans (debt) that you take on in order to pay for the costs of attending schools. While some people take out student loans just to cover a portion of their tuition, others take loans that cover the full amount of tuition, room and board, plus expenses like computers, textbooks, and food.

There’s no getting around the fact that student loans can be super expensive. For many, they can take decades to pay off. Keep reading to find out how building your credit score with Fizz can make your student loans a whole lot cheaper.

Interest rates 101

While there are hundreds of things to consider when it comes to paying for college with student loans, one of the biggest things to highlight is the interest rate. The interest rate, usually expressed as a percentage, is the amount of money you will have to pay your student loan provider for providing you with the loan, on top of the loan itself. It’s the price that the loan company charges for giving you money right now. If you apply for student loans with a low or non-existent credit score, your interest rate is likely to be higher and you’ll have to pay back even more money.

Here’s a quick example. Say you take out a student loan of $10,000 for your freshman year of college and the loan has a 4% interest rate. That means that every year before you’ve fully repaid the loan, you’ll owe 4% of your outstanding balance. You’ll usually pay this interest off monthly, combined with a portion of the $10,000 itself, which is called the principal.

What does it mean to refinance your student loans?

Refinancing is super common when it comes to any type of loan. Refinancing your student loans just means that you’re renegotiating the payment terms that you originally agreed to with your student loan provider. You can typically use a good credit score to get a lower interest rate and/or pay off your loans faster.

A lower interest rate on your student loan payments will free up money for the rest of your budget and allow you to save, invest, or make different lifestyle decisions (like buying lunch a few times a week instead of making it yourself). But in order to get that lower interest rate, you first need to think about your credit score.

How does my credit score impact my student loans?

Here’s the most important part. When approaching a student loan provider or bank to refinance your loans, one of the first things they’ll look at is your credit score. Your credit score is a number that tells lenders how likely you are to pay back their money based on how good you’ve been with money in the past. Without a good, great, or excellent credit score, many lenders won’t even consider you for refinancing, meaning you may miss out on the favorable, lower rates that come with refinancing.

Fizz is a great way to start building your credit score now so you’ll be ready when it’s time to refinance. With a Fizz card, you can build credit with a debit card and earn cash back at the places you love most. Joining Fizz is easy and takes less than 3 minutes. There are no hidden fees (just an upfront membership charge), no interest rates, and we don’t even check your credit. Plus, we link to your existing bank account to make things easy for you and to keep you from overspending. Cheaper student loans are just around the corner, so sign up to get a Fizz card today!