Credit scores help ‘keep track’ of financial credibility

photo by cafecredit

Guetshina Altena/Assistant News Director

55 percent of college students don’t know their credit score, and 43 percent of students believe that college is the right time to learn about credit scores, according to a 2016 study by Equifax.

Credit and credit scores tend to be instrumental in one’s ability to purchase a car, a house and other big expenses.

Maria Eva Gomez-Pinto is the branch manager at the University’s Credit Union. She believes credit scores are a good way to keep track of one’s history when it comes to borrowing money.

“Credit score is ranking of what your credit is. It exists because there has to be some form of way when you apply for a loan or a credit card to be able to see where you stand,” Gomez-Pinto said.  “What’s your history, if you’ve had late payments or if you don’t, your credit limit, if you maxed out on your cards, so it’s just a way to tell the lender how good your credit is to see if you can qualify for a loan product.”

Gomez-Pinto said that if someone has bad credit, the lender might think that person is a risk if they approve them, especially when it comes to a loan with no collateral such as a credit card or personal loan. A loan with collateral, however, would be for a house or a car.

“You might be able to qualify for a house loan if you don’t have excellent credit but your requirements might be that you put more money down, your rate for sure would be higher if your credit is not good,” Gomez-Pinto said.

Credit unions offer different credit options for students. Gomez-Pinto recommends them to student especially those who work full time or part time, or over 30 hours a week can get a credit card of a $500 minimum available credit.

“In my opinion, it is very important to know about your credit and to start building a credit when you’re young,” Gomez-Pinto said. “One of the things we offer here [at the University Credit Union] for example is a secure card which helps you to start getting some credit and it’s a way to help students build up their credit.”

Unfortunately, Gomez-Pinto said a lot of students get multiple credit cards and get into debt before they graduate.

“That’s a mistake because if you have student loans, you still have to pay them after you graduate. But I do believe that it is important to start young, that way you start a score and the higher it is, the lower rates you can get for car loans for example and it is a benefit in the future,” she said.

But, it’s worse to have bad credit then to have no credit at all, according to Gomez-Pinto. A way to fix bad credit, she said, is to get a secure card and keep up the payments on time before the due date then 6 months to a year later, one can apply for a regular card.

University Credit Union offers credit cards with benefits like cash back, rewards points and travel benefits. These cards, she said, are beneficial for those who pay off their balances every month.


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