Whether considering to get a new car or possibly to rent a new apartment, good credit is a must, but managing a good credit score can be a mystery to many students.
“When establishing someone’s financial reliability, looking at the character of how they’ve paid in the past, credit score and credit history determines the approval of the loans,” said Ian Addington, The Bank of Kentucky Florence branch manager.
Students who haven’t started building their credit yet are not alone. Lee Epling, a junior Information Technology major, is one student that uses a debit card instead of a credit card.
“I don’t see a reason, it’s just more trouble,” Epling said.
Addington said to keep a limit of two credit cards, one from a bank and possibly a retail credit card. When getting a retail credit card only get one to a store you shop at frequently, he added. And make sure that you’ve paid off the balance of your credit card each month otherwise it will inquire interest.
Addington recommends when unable to pay the full bill upfront, make sure it’s a low interest rate of 15 percent or less. It’s okay to close a credit card account at any time, just make sure there is a zero balance. However, he added that the longer a card is kept the better it looks for your credit.
Don’t listen to the commercials and check your credit all the time, advised Addington. It’s okay occasionally, but loan dealers can see how many times you check. Just let them do the checking and you pay the bills.
“A good credit score is anything above a 700, a top mortgage loan is given to those with a 740,” Addington said.
When applying for credit cards make sure there is no annual fee, low interest rates, or rewards. Cash back, air miles or gas points can all be earned through credit cards. Just read the fine print.
Daniel Kirschner, a senior Computer Information Technology major, limits himself to one credit card with a low expense limit. His credit card doesn’t have a rewards system but if he wanted one, he’d choose one with cash back, not a points system.