Bill paying habits established in college can affect students' credit scores for years to come.

Reputable credit counseling organizations advise you on managing your money and debts, help you develop a budget, and usually offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting.

A reputable credit counseling agency should send you free information about the services it provides without requiring you to provide any details about your situation. If a firm doesn’t do that, consider it a red flag and go elsewhere for help.

If you do accumulate debt, you can take steps to improve your credit history by consolidating debt and paying off outstanding loans. But be warned, applying for new credit and opening new accounts frequently can make things worse. The number of inquiries on your credit report will affect your score as a large number of inquiries on your report will make lenders think you are planning to run up a lot of debt.

Your credit history is all the information—such as credit accounts, balances due and details of your payment history—contained in your credit report. This information is collected and updated regularly by the three reporting agencies (Equifax, Experian and TransUnion). Your credit report also contains information about bankruptcies, overdue debt from collection agencies, foreclosures, liens and judgments. Whenever you apply for a loan or a line of credit, you authorize your lender to ask for a copy of your credit report.

Your proven ability to manage your money and meet your financial obligations is the basis of your credit score. The best way to build a solid credit score is to make a habit of always paying your bills on time in full each month. Your goal should be to build a long history of reliable bill paying behavior.

Insurance scores and credit scores differ. Credit scores predict credit delinquency while insurance scores predict insurance losses. Both are calculated from information in a credit report, such as outstanding debt, bankruptcies, length of credit history, collections, new applications for credit, number of credit accounts in use, and timeliness of debt repayment. Insurers or scoring agencies then calculate the insurance or credit score by assigning differing weights to the favorable or unfavorable information in the credit report.

Credit scores are based on an analysis of an individual’s credit history. These scores are used for many purposes such as securing a loan, finding a place to live, getting a telephone and buying insurance. Insurers often generate a numerical ranking based on a person’s credit history, known as an “insurance score,” when underwriting and setting the rates for insurance policies. Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims.