Expert Advice: How to Build Credit Without Ruining Your Score | New

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Have you ever heard of credit? We have you. When managed well, credit cards can be an essential part of building credit while in school. Melissa Hart, lecturer in finance, and Hailey Amass, president of the Financial Literacy Club, gave advice to students on how to manage their credit while in college using a credit card.

Amass, a third-year accounting and finance student, explained that credit is any money you’ll have to pay back. Credit cards and student loans are examples of money you need to borrow and repay, allowing you to build up credit.

“It’s important to start developing good credit habits at a young age rather than waiting until needed,” Amass said. “Although we’re not buying homes right now, it’s good to have an established credit history because the longer your credit has been established, the better it will be on your score over time.”

Hart said credit is important because almost everyone will need it to eventually make a big purchase, like a house or a car. Credit is what will be used to assess a person’s ability to repay their debts. Therefore, when trying to make a major purchase later in life, the better your credit, the better.

“Almost everyone will make a major purchase someday,” Hart said. “If you don’t have credit when you try to make a big purchase one day, you’re either going to need a co-signer or pay a very high interest rate.”

Amass said the best way to build up credit while in college is to open a credit card at age 18 and actually use it.

“You can find a student credit card at many banks and then use it for any purchase rather than paying cash or debit card and then pay it off immediately,” Amass said. “Use it like you would cash and live within your means, don’t overspend and it will strengthen your credit.”

According to Hart, a small part of credit score is the length of credit, but the majority is payment history, so student credit cards are a great way to build college credit.

“The FICO score has two components that make up 65% of your credit score, the first being payment history,” Hart said. “There’s only one way to have a payment history, and that’s to have credit.”

Hart said students are often hesitant to use credit cards for fear of overspending or spending money they don’t have, but a little self-control will go a long way toward getting a credit card. credit.

“That’s the part that I think scares students the most: if they give you a line of credit, what if you spend it all?” said Hart. “You have to exercise a little restraint, but even if you spent the maximum, it would take you a long time to pay it back, but you would have a great payment history.”

Amass said the best resource for students on campus is Talley Student Union’s PNC bank, located on the second floor.

“It’s really convenient with its location, and they have a lot of options for students to start building their credit,” Amass said.

Ultimately, Hart and Amass advise students to find a credit card that best suits their lifestyle and personality in order to accumulate credit and prepare for life after college.

“Understand what your limits are, whether you’re a saver or a spender, and knowing yourself can really mesh well with what you’re trying to do with your credit,” Hart said. “Know yourself and know your situation.”

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