College is an ideal time for students to learn new skills and develop good financial habits that will serve them well into their adult years. While focusing on a career may be what first comes to mind for some, it’s not the only factor to consider - this can also be a great time for students to learn about credit. Everwise Credit Union is here to help and has many tools and services available so students can feel confident obtaining and managing good credit by the time graduation day comes around.
“Credit is a tool. It basically says if someone is good at repaying their debts. There are also many benefits of having credit, too,” said Everwise Financial Wellness Director Jeff Sobieralski.
Having and maintaining good credit is pertinent when making many adult purchases, such as renting an apartment, applying for a loan, obtaining utilities, booking hotel rooms or rental cars with a credit card, as well as other items. Most companies look at credit with a similar objective in mind - to see if someone is financially responsible and capable of paying back money they’ve borrowed or able to pay for services used. Car insurance companies may also consider someone’s credit score to determine how responsible one may be behind the wheel.
Credit scores can even factor into one’s employment, depending on the field of work. For example, if someone applies to work at a financial institution, a credit report is often run to assure the potential employer that the applicant is fiscally responsible before they begin advising others concerning their finances.
With many important life choices highly dependent on credit, the earlier one can start building it, the better.
“When you start building credit early, you're starting to create good financial habits, and those good financial habits are probably going to last a lot longer. Although not impossible, it's harder as you get older to create new financial habits and keep those practices going,” Sobieralski said. “Building credit when you're younger may help propel your financial success when reaching milestones later on in life, such as when you get married, get a car, or have a child. When you start thinking about having these tools available, it makes life a little bit easier as you get older.”
This is what makes college an ideal time for students to begin understanding how to use credit, and Everwise is here to help with different options and services.
For example, students can apply for an Accelerate Secured Credit Card, which allows them to borrow against the amount they have in their savings account as a way to initiate or raise their credit score.
Everwise offers small loans as a means to help students initiate or boost their credit too. Sobieralski explains the Everwise Lift Credit Builder Loan, which allows students to pay low amounts over a period of time while the principal goes into a savings account. He also noted programs for auto lending and student loans are available as well.
“The reason I like the Lift Credit Builder Loan so much is when you're starting to build credit, it can be set up for a longer term. And one of the biggest impacts on building your credit is your payment history, so the longer the term, generally the better. It also can have a lower rate, helping keep everything minimal while building credit and increasing one’s savings,” Sobieralski said.
Sobieralski mentioned there are some easy tips as you begin building credit that are important to know. For example, he recommends looking at the fine print that comes with any credit card offer received via mail or email to be familiar with all the terms and conditions. Another tip is regarding paying off a loan early, find out if there are any additional fees. Or if you obtain a loan, will all the payments initially be applied to interest before applying to the principal.
Sobieralski also stressed the importance of making sure payments are on time to avoid accumulating any unwanted interest, especially with zero-percent promotional credit. Often making even one payment late nullifies the zero-percent offer, which means the interest accumulated from when the loan was initiated is added back into the balance. Making payments on time is a tried-and-true way to help keep a credit score well maintained. Sobieralski recommends setting up automated monthly payments to ensure that not even one payment is accidentally missed.
Sobieralski also advises everyone to request an annual copy of their credit report to review for accuracy. These are fairly simple to receive and can be obtained at sites such as annualcreditreport.com.
No matter where someone is in their financial journey, Everwise is willing to work with them to find the best path moving forward. Despite the weight a credit score may carry for lending, it’s important to remember that it’s just a number and never an ultimate definer of someone’s character. Life can happen, and Sobieralski and the Everwise team are available to work with anyone who needs help building credit or to help get back on track.
Sobieralski said, “Everyone’s financial journey is unique, so when you come into Everwise, we're going to ask questions to determine what's going to work best for your financial situation. For instance, some students are going to work a job while they're going to school, while others will not. Some may work part-time, some may have to pay rent, and some may already have student loans. Every situation will be different for each student, and it’s not one-size-fits-all, so we want to sit down and have a conversation to find out what’s best for them.”
For more information on the services Everwise Credit Union offers to help build credit, visit its website at everwisecu.com.
