With increasing costs of living and even higher tuition costs, it is easy for students to turn to credit cards for extra spending money and even easier to end up swallowed by their debt.

That is why Vickie Smith, director of business development and community involvement at Lake Michigan Credit Union, said it is vital for college students to keep credit reports clean and credit scores high.

“It’s not difficult to maintain a very positive credit rating, but you need to always strive to make sound decisions,” Smith said. “Remember, once you turn 18 you are considered legal and will be held responsible for things you sign and the agreements you enter into.”

Smith facilitates Lake Michigan Credit Union’s “Money Matters” Financial Literacy
program, and leads presentations in more than 130 classrooms in area schools each year.

Smith sat down with the Lanthorn and offered tips and advice to Grand Valley
State University students about how their credit score can impact their life.

1. Make it a habit to read everything you sign

Smith said the second you sign a document, it means three things: “I read this,” “I understand it completely” and “I accept everything it says.”

“Once you place your signature on a document, you are responsible for knowing what you just signed,” she said. “At that point you will have to live with the conditions stated in the document.”

2. Credit reports are used in several areas OF WHICH students may not be aware

Though it is obvious credit reports will be a part of loan applications or apartment
leases, Smith said that in Michigan, it is legal for insurance companies to run a credit report before quoting rates for auto insurance.

Additionally, Smith said the fastest-growing use of credit reports in the U.S. is by employers screening applicants for employment, with many companies
adding the credit report screening into their company policies.

“Even if you had an exceptional interview and passed the application testing with flying colors, if their policy is to run a credit check before offering
any employment positions, you may be out of luck if your credit report has blemishes on it,” Smith said.

Having a bad credit score, she added, can have a big impact on the interest
rates during loan repayment as well.

3. Credit reports are for life

“Your credit report is what we call your ‘report card for life,’” Smith said. “Just like your school report card is intended to show how you are doing and if you are handling things correctly, your credit report tells us how you are handling the credit in your life.”

Your credit score, she said, is a tally of points you earn by doing good things with your finances — like paying on time or having a good blend of loans — or points you lose by paying late, missing payments, keeping high credit card balances or even opening numerous credit cards in a short window of time.

In the end, keeping a credit report clean is about knowing the money you have available and spending accordingly.

“Simply said, to keep your credit report looking its best, be sure to make all payments in full and on time, have a budget and commit to living within your financial means,” Smith said.

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