We want our customers to have better information so that you may save yourselves more money. Right now, most pricing is risk based. Basically, that means the more risky you are the higher the interest rate you'll be charged and vice versa. The way to save interest when you borrow is to limit the amount of perceived risk loan officers see when they look at your credit bureau. Loan officers will use a scorecard that allows them to score potential borrowers.
Financial institutions do a great deal of work compiling statistics on performance.
As consumers, we can do ourselves a great service by understanding the criteria. UCMS has an illustrative example scorecard below. An inquiry is when you apply for credit and a financial institution asks a credit bureau for your report. As you can see, if you apply for a rash of five cards, you lose points. As college undergraduates, you have a real opportunity here to save some money by doing some quick planning.