Credit questions answered

Surrounded by loan offers, credit card advertisements and ever-thinner pocketbooks, some SPU students need financial information and answers.

Christine Conway, director of Northwest Education Loan Association Services, spoke of the importance of a good credit rating, among other finance-related topics, to college students at a student loan seminar on Jan. 28 and 29.

At this time, many students have student loans, the best type of loans to start a credit line with, Jordan Grant, director of Student Financial Services, said.

With these debts, college students are the perfect target for creditors and are often advertised to more frequently, Conway said.

Junior Christopher Davis, a student at the seminar, said he knew most of what was presented in the seminar but thought his friends probably didn’t and should know the information.

This is the perfect time to be proactive about your credit score, increasing chances for a lower interest rate on loans and insurance, Conway said.

In order to ensure your credit score is where you want it to be, "your homework over the next month is to get a free credit report," Conway said, directing students to a credit report Web site (http://annualcreditreport.com).

A credit report is "a value of your credit worthiness," Grant said. It is a summary of your entire credit history for the past seven years culminated into one credit score.

"Think of it like your GPA," Conway said. It is a summary of all the accounts you have used, she said.

Conway recommended a score of at least 720 to receive a loan.

With the average score being around 692 in the United States, freshman Breanne Harris said she felt stressed and worried about her future.

Debbie Bristol, assistant director for Student Loans and Collections, said it is worth doing research and learning more about credit reports and loan options. She suggested researching loans as much as possible before actually walking into the bank.

Filling out the Free Application for Federal Student Aid annually can also help students qualify for government-funded loans, potentially saving students thousands of dollars in interest alone, Grant said.

If your credit is not that great then a credit-worthy cosigner, who is willing to sign with you on a loan, could be incredibly beneficial as long as timely payments are made on the account, Bristol said. Examples of cosigners would be parents, relatives or anyone trustworthy with good credit.

Conway also suggested having some credit other than student loans. Credit cards are not bad inherently; it’s what you do with them that can make them evil, she said. Conway recommended having at least one credit card with a low limit to build up some credit, making timely payments. She also suggested, however, being careful how many credit accounts you open.

"Every time you apply for credit, the information you write down is sent off to credit bureaus," she said. This results in credit card ads via mail. Conway said to stop receiving these ads and minimize the risk of identity theft, call 1-888-5OPTOUT.

The best thing to do if you are worried about your financial well-being, Bristol said, is to communicate your concerns with SFS and to attend the sessions they put on.

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Title: Credit questions answered | Author: Briannan Mandrell | Section: News | Published Date: 2009-01-28 | Internal ID: 5863