For many students, the key to a high credit score can be a mystery. However, a student will have difficulty getting loans or borrowing money from the bank without one.

Maintaining a good score can be tough on a tight budget. With housing payments, the cost of tuition, books, food, gas and everything in between, students already often find it challenging to stay out of debt.

The process of keeping a good score is simple: stay out of debt by paying bills on time.

Bruce Koehler, Senior Vice President of the USF Federal Credit Union, said he believes debt-free living is crucial.

“It’s alarming to me the amount of debt (students) are taking on at this stage of their lives,” he said.

A credit score is determined by the three credit bureaus – Equifax, Experian and TransUnion – and is based on a person’s creditworthiness, which is determined by five factors according to bankingmyway.com. These five factors are payment history, outstanding debt, length of credit history, new credit accounts and types of credit.

The three companies use what is called the FICO (Fair Isaac Corporation) method and establish a credit score between 300 and 850, according to bankingmyway.com.

This credit score places a value on an individual’s credit history, which is used to determine credit card limits and evaluate credibility when applying for loans. The higher the credit score, the better.

A credit history is typically established with a credit card. Most credit card companies are eager to sign up new customers by offering to give back percentages on purchases, award frequent flyer miles for points and even pay off a customer’s bills for a month.

Once having obtained a card, or several, new consumers often have a difficult time keeping up with their payments.

The federal government plans to take action on such debt issues as well.

Starting in February, the Credit Card Accountability Responsibility and Disclosure Act of 2009 will prohibit anyone under the age of 21 from applying for a credit card without a co-signer.

The act aims to provide security to creditors and prevent students from spending above their credit limits. Koelher said consumers who spend more than 50 percent over their credit limit will drive down their scores, and a lower score will drive up the interest rate on the card.

Almost two-thirds of all students from four-year degree programs will graduate with student-loan debt, according to studentdebtalert.com,.

Koehler said the easiest way to avoid this is to simply pay bills on time or even before their due dates. This will not only prevent a sinking score from dropping any lower, but also establish a positive credit history.

Another suggestion Koehler offered was to maintain an open line of credit. This means that instead of closing a card that is paid off, keep it open but don’t make any transactions. It will help to stabilize the situation, he said.

In a situation where money is not readily available, the best thing to do is stay in constant contact with a creditor.

While paying bills after the due date will drop a credit score, Koehler said, “(a) lender should never have to call you about a past due payment.”

There are some simple steps to avoiding a low credit score, Koehler said:

Get a new card with a responsible co-signer, such as a parent or guardian. This way they can help track spending and make payments if a student has a tight financial month.

Set personal limits for the card, such as using it strictly to pay for gas and food – and stick to them. In the meantime, pay off any other cards with balances one at a time before receiving the next card statement. Do not close the paid off cards, which will keep open lines of credit.

The importance of a good credit score is evident when buying a home or applying for a loan. A higher number demonstrates dependability and responsible spending.Anything greater than 700 is generally above average, according to credit-factor.com, but a good score can vary for different agencies.

The Fair Credit Reporting Act entitles all Americans by law to one free credit report by request a year. Students that don’t know their credit scores may want to request their free report from the bureaus by visiting annualcreditreport.com.