College and Credit: A Take on Making Every Dollar Count / By: Leslie Walker

College is approaching! As you pack your bags and buy your dorm essentials, there’s one more conversation you must have before you step on campus: credit. Understanding and building your credit is an essential skill that has historically been more successful with an early start. Amid college jobs and costs, using your finances (while they are low stakes and flexible) to create your economically responsible future is a great way to prepare for adulthood. “When I was 18, 19 years old, my family didn’t explain much on building credit, so instead of having a good credit score right out of college, I was starting at 22 years old”, Latoya Hudson, a counselor at Walter Payton College prep explains. “The earlier you start, the less you’ll have to worry about once it really matters”. Good credit is beneficial for a plentitude of reasons like purchasing a house or buying insurance. As scary as it may seem, building and managing your credit as a young adult doesn’t have to be difficult. While some parents create joint accounts with their children to build their credit, starting from scratch is the most traditional route to opening a credit card. Before doing so, it’s important to learn the basics of your credit score and credit report. The three-digit credit score reflects your risk as a borrower based on how much money you tend to take out and how timely your payments are. Payment history and the amount of debt you owe—are the most important credit factors, making up 65% of your score (Brown, Taver, 2021) . Your FICO credit report creates your score and is reviewed by possible lenders. Once you’ve got these concepts down, you’re ready to open an account. Luckily, there are plenty of low-balance student credit cards to prepare you for that special black card. “ You don’t have to max out your card either- just a few purchases a month and paying more than your balance will do you good.” Kathryn Person, an AP Microeconomics teacher at Walter Payton College Prep states. These student accounts tend to vary in low APR, cashback benefits, or free FICO reports. As ranked by many websites, an example of this is the Discover Student Cashback card. With no minimum credit scores, its $0 annual fee, competitive cashback rewards rate, first-year cash back match and user-friendly terms, (Yarbrough, 2022) it’s often perfect for students on a budget. Using this card, you’ll gradually step into managing your credit responsibly. htt ps://www.forbes.com/advisor/credit-score/how-to-build-credit-at-18/ https://www.bankrate.com/finance/credit-cards/reviews/discover-it-for-students/