A different kind of report card

Navigating your credit history can be scary, but students should start paying attention now rather than later.

Ashley Bray

The only car I ever owned was a 2001 Cadillac DeVille âÄî four doors, V-8 engine and heated seats that worked sometimes. It was red. According to my credit report, however, I also own âÄî and took out a loan for âÄî a 2002 Chevy Suburban. I assume itâÄôs a four-door. ItâÄôs a V-8 for sure and probably has heated seats. I wonder what color it is.

Clearly, somebody messed up. While it is fairly common for small errors to show up on your credit report from time to time, mistakes as big as faulty car loans can happen as well. As such, I am (unfortunately) the prime example as to why it is important to start paying attention to your credit report now, as college students.

Most of us know that having good credit can affect decisions you may make in the future. For example: Purchasing a house, applying for a credit card or buying a car are all things that require an evaluation of your credit. Additionally, more and more entities are beginning to take a look at your credit report âÄî entities that have a direct effect on studentsâÄô lives.

Employers are starting to look at credit history, as are landlords and utility and insurance companies, said Catherine Solheim, associate professor in the Department of Family Social Science. “Many people arenâÄôt aware thatâÄôs itâÄôs not just [looked at] for a car or a home anymore.”

“Students should be especially concerned about their credit reports if they are getting a job,” said Rosemary Heins, extension professor with Family Resource Management Team. “Potential employers are one of the many groups of people interested in your history.”

According to Solheim, the reason for looking at credit history is because itâÄôs a reflection of your character. Employers, landlords and financial institutions want to know whether a person is paying his bills on time, if he is responsible with the lending process and if he has had any experience with building credit in the past.

Paying your bills on time is the most important thing you can do to make sure your credit report looks good. According to Heins, 35 percent of your credit score is whether or not bills get paid on time.

While knowing your credit score is important, experts agree that it is not imperative, and checking your history annually is the most important thing to do.

Luckily for college students (and anyone who likes to save money), since the Fair and Accurate Credit Transactions Act of 2003 was passed, everyone has the right to request a credit report for free once per year from each of the three major agencies that produce credit reports.

Experts encourage people to use the website annualcreditreport.com, which is really the only place you can get a free report, Heins said, despite all those commercials with catchy jingles.

Once they get their history, the first thing students should do is make sure itâÄôs accurate. Credit reports and scores are repairable, so if there is a mistake, there is no need to panic, Heins said.

For example, SolheimâÄôs advice to me was to write a letter to all three of the reporting agencies to dispute the faulty car loan and request that it be removed. Afterward, there will probably be an investigation in which the agencies will have to figure out whoâÄôs Suburban is on my report and have it taken care of. Other mistakes should be handled in the same way.

Solheim recommended making a habit of checking your credit history once every year âÄî at the same time you file your taxes âÄî to make it easier.

“Remember: More and more, your report is a reflection of who you are as a person,” she said. “Right or wrong, itâÄôs being used in that way, so itâÄôs best to know what is going on.”

 

Ashley Bray welcomes comments at [email protected].