In the world of finance, your credit score can make or break you. A mistake can haunt you for a very long time, possibly forever. Late payments, out-of-control debt, even bankruptcy — all can have permanent effects. It’s a simple fact of life.
Sadly, it’s one that young people very often don’t grasp until it’s too late. They neglect their credit in their young adulthood, only to find out how crucial their credit score is when it’s time to seek a student or home loan or buy a car. Apparently as many as half of students have never checked their credit scores.
Only half of college students check their credit scores, according to a survey from U.S. Bank of undergraduates ages 18 to 30. The survey was conducted online and fielded responses from 1,640 part- and full-time undergraduate students in the U.S.
Perhaps some of those students don’t have credit scores to check — unless you have a credit card or a loan, you won’t have a credit history on which to base credit scores — but given the ubiquity of student loans, it seems unlikely that such a large share of students are without credit scores.
As soon as you start using credit, you need to keep track of how well you’re managing it. Credit scores are used for a number of common things, like getting an apartment, setting up utilities, activating a cellphone account and getting car insurance, to name a few. Of course, if you want to get credit cards, an auto loan or a mortgage at some point, you’ll want a great credit score: The better your credit score, the more options you have when shopping for credit products, and the lower your interest rates on borrowed money are likely to be.
This can’t be stressed enough:
If you have a credit score, check it regularly and if necessary work to improve it. There are authentically free reporting services (in exchange they make credit card or bank account offers you can ignore) like CreditKarma.
If you don’t have enough credit history to have a credit score, get on that. Parents, there are things you can do to help kids start building credit history. If you’re a young person and your parents can’t help, you still have options. Starting with store cards is a popular avenue. Stores are generally quick to offer lines of credit and it counts towards your credit history.
This is stuff that affects the rest of your life. It determines what you can afford and can’t afford. It determines your home, car, education, and general standard of living. Start early and stay vigilant.