[Natfinwellness] Credit Scores (Starting Score)

[Hagan, Timothy]

There is a simple solution to building a solid credit history and a good credit score that applies to many students. It's the general rule and there will be exceptions.


1.       The student should obtain a credit card with a low credit limit from "their" financial institution. If they don't have a local account, they need one to avoid ATM fees and have a real person to talk to about issues. This strategy offers a good chance of approval without getting a lot of "dings" from hard inquiries that result from multiple credit card applications. It also gives the student a chance to build a good relationship with the financial institution. Then the student should charge one (1) and only one single solitary low cost item that they would have bought anyway every month. They then pay off the entire balance well before the due date on the monthly statement. This pattern gets them in the habit of buying only what they need with the credit card and paying off the whole balance every month.

This strategy builds credit history and score in the

a.       Credit Card Utilization

b.      Payment history

c.       Age of credit history

areas of their credit score while avoiding derogatory remarks and multiple hard inquiries.


2.       If they have a student loan they are set up to continue to build their credit score by adding the second of the 3 types of accounts, an "installment loan", to their credit history and further increase their credit score after they graduate.

The education they receive while in school should emphasize that they should never ever miss a payment and to never ever carry a balance on the credit card from month to month.

After a couple of years of steady student loan payments in combination with even longer great payment history on their low balance credit card their score should in very good shape. This should put them in a good position to borrow only the debt they need to help purchase a car they need to get to work or explore the possibility of a reasonable mortgage when the time comes.

Tim Hagan, MBA
Financial Literacy Project Coordinator
Office of Student Success
1845 Fairmount, Campus Box 97
Wichita, KS 67260
316-978-3211
tim.hagan at wichita.edu
www.mycollegemoneyplan.org
@CollegeCostTips
[MCMP Logo-02]




From: Natfinwellness [mailto:natfinwellness-bounces at lists.osu.edu] On Behalf Of LIPINOGA, LAUREN
Sent: Thursday, June 23, 2016 5:41 PM
To: natfinwellness at lists.osu.edu
Subject: [Natfinwellness] Credit Scores (Starting Score)

Greetings All,

I'm working on revamping our Financial Literacy consultations and what is discussed during them. For our Building & Managing Credit consultation, one topic discussed is credit scores, including the range and if you're just starting to build credit, where you generally start in terms of score? I know the range is obviously 300-850 but have seen conflicting things regarding where folks start in terms of a credit score. Does anyone know where I could find this information/know the answer so that I can pass on the appropriate information?

Thanks!
Lauren Lipinoga

Lauren E. Lipinoga, M.Ed.
Coordinator of Financial Literacy, Student Success Center
Division of Student Affairs and Academic Support
Thomas Cooper Library-Mezzanine
1322 Greene Street
Columbia, South Carolina 29208
Phone: 803.777.9972
Email: lipinoga at mailbox.sc.edu<mailto:lipinoga at mailbox.sc.edu>
[https://www.parkersearch.com/dashboard/uploads/photos/usc_long1351087132.jpg]
http://www.sa.sc.edu/ssc/

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