Get Smart About Credit
Thursday, October 20 is the American Banker Association’s official Get Smart About Credit Day. With so many young people starting their adult lives burdened by significant debt and financial stress, let’s take a moment to review some of the “credit facts of life”.
Protecting your Financial Identity
Identity theft can cost you – in time, money, and serious headache. Unfortunately for us, the rise of the Internet has made it even easier for identities to be compromised. Do you know what you share on social media could be used to steal your financial identity? Sharing full birth dates, high school names, phone number, and pet names could potentially set you up as an easy target for people looking to steal information. These things are all used to verify your identity. Fraudsters could use it to create trouble for you by opening up a credit card in your name. Have you ever participated in a free survey or downloaded a video on social networks? Malware is hidden in these sites and links that are designed to gather more personal information about you. Use caution when using social media so that you do not become a victim of identity theft.
Financing Higher Education
The national level of student loan debt is at $1.26 trillion. 43.3 million Americans have student loan debt. If you are going to college or have a child gearing up for college, do you have a plan in place to pay for it? Understanding the financing options and the total cost is key in order to avoid a financial disaster when it comes time to start paying that money back. There are millions of companies out there saying they can help, but be aware that the offer might be too good to be true.
Here are some trusted resources that can narrow down your search in funding options:
- Federal Student Aid
- Free Application for Federal Student Aid (FAFSA)
- Consumer Financial Protection Bureau
- Looking Forward to Your Future
Know Your Score
Credit scores are assigned based on how much available credit you have and how much of it you have used. How you repay your debt is factored in – do you pay the minimum or the full balance? Do you pay late or on time? Your credit report can be pulled by potential employers, banks or landlords. They want to know if you can manage your money well. When applying for a loan, the interest rate you pay is determined by how high your credit score is. The higher score, the lower the interest rate. A poor credit score will cost you more money in the form of a higher interest rate on the loan. The key to managing your debt responsibly is to pay all bills on time, every time. Knowing all of your monthly payment obligations will allow you to avoid over-spending.
You are entitled to one free credit report per year from each of the credit reporting agencies. Request one from all three:
Learning healthy credit habits can be one of the most valuable lessons as you grow into adulthood. We’re here to help with any of your credit questions.
