? T A H W T I ? CRED O H W T I D ? CRE N E H W T I D E R C
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Credit What? Picture being 26-years-old, newly married and ready to settle down to buy your first home. The bank declines your loan request because you have yet to establish a credit history. Immediately, you regret shredding all of the credit card offers that began pouring in the mail soon after your 18 birthday. “Building credit is important for everyday things,” says U.S. Bank Branch Manager Selena Salmon. “It’s important for getting a house, buying a car and sometimes employers will look at credit.” Establishing credit may not seem pertinent to any immediate wants of a sophomore in college. However, building it early will support your wants in the future.
Credit Who? Salmon doesn’t agree with the statement that no credit equals bad credit. But she recognizes that good credit is better than no credit, believing that individuals should start building credit early. “Students should start building credit at age 18,” says Salmon. Individual student’s views of credit play a role in when or if they decide to open credit cards. “I’ve tried for the longest time to avoid getting credit,” says Vanessa O’Francia a junior Psychology major at Central Washington University. “I don’t like the idea of owing someone or paying something back.” O’Francia’s only line of credit is a dental credit card. She applied for this card because the health and care of her teeth are quite important to her. “Honestly, I just do it [build credit] because my parents told me I need to do it,” says Arturo Arellano, a CWU sophomore Political Science major.
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Arellano, whose parents made him apply for a credit card after turning 18, is now two years later, seeing the benefit of building his credit. Arturo has also been exposed to the downside of debt, maxing out a card with a $2,000 limit. Though his parents helped bail him out this first time, they required him to pay half of the balanced owed.
Credit When? “Using [your card] responsibly, you’ll raise your credit score,” says Salmon. The general consensus: it’s better to not have a credit card than to have one and abuse it. “It’s all about when you feel comfortable with the responsibility,” says Arellano. “When you have a sustainable monthly income, you’re not relying on you card alone to pay bills.” It’s encouraged that individuals start building credit at age 18, but it comes down to personal preference. “You should really start no later than age 20,” says Quy Dai Lam Quach, a senior Business Finance major at Seattle University. “By that age, you’re somewhat understanding of the financial responsibilities… but it’s different for everybody.” Not using your card in a responsible fashion will cause you to both damage your credit and be out of a lot of money.“There is a tendency to spend more than you can pay back,” says Lam Quach.