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Why college students should consider credit

Click here to follow the Dupaco Great Credit Race and learn how to build your credit!When Ben Strautmann turned 18, credit cards didn’t have a good reputation in his family.

So, he was in no hurry to apply for a card of his own.

“I think it’s healthy to talk about the dangers of credit cards, but to just leave it there and only be afraid of them will leave you not understanding the benefits they can have,” says Strautmann, who is a credit coach for Dupaco’s Great Credit Race.

Today, many young adults are avoiding credit. A 2016 Bankrate survey found that less than a third of Millennials have a credit card, while more than half of people age 30-49 own one and nearly 70 percent of people over 65 do, according to a CNNMoney story.

When used responsibly, credit cards can be a tremendous credit-building tool. But here’s what every college student should know before applying for that first card.

Understand how credit works

“We see so many college students with student loans and credit cards that are maxed out,” says Great Credit Race coach Tonya McGlaughlin. “Make sure you understand how credit works before you start jumping into credit cards.”

Dupaco can help. During a free, one-on-one Credit History Lesson, you can learn the ins and outs of credit—and how to start sending your score in the right direction.

“Yes, Dupaco will help you build your credit back up if something happens,” says Great Credit Race coach Marina Henriksen. “But it’s a lot easier to build credit instead of fix credit.”

Start as soon as possible

The length of your credit history makes up 15 percent of your score. The older it is, the better.

“If you can get a credit score of 700 just from opening one credit card, think about how much better you’ll be when you get out of college and already have that credit established,” Strautmann says. “Credit will impact the rest of your life. It’s going to be involved when you buy vehicles, when you buy a house, when you do anything.”

Choose your card carefully

Steer clear of the never-ending credit card offers you’ll undoubtedly receive, cautions Great Credit Race coach Amanda Durham. Keep it simple.

“You have to have something, but only have one card, and have it be with your financial,” she says. “The terms and convenience are better. You can go to online banking to pay it off immediately. And if you have any issues, you call me directly, not an 800 number.”

Use your card wisely

The Great Credit Race participants who have used their cards for small purchases and paid off their balances immediately have been the most successful at building their scores as high as possible during the six-month competition.

“One of the things I hear a lot is, ‘I have to use my credit card a lot to get a score,’ and that’s not the case,” Henriksen says. “In the beginning, we need you to have some activity for it to start reporting. But if you’re keeping your card active and paid off, it’s benefiting your score.”

Even small balances are helping you get in the habit of managing bills within your budget.

Monitor your credit

When you build your credit, you also should monitor it. With Dupaco’s free Bright Track credit monitoring service, you can review your credit report and score any time—and keep an eye out for fraud.

“If college students are willing to use Bright Track, they should,” Durham says. “It’s not just about seeing your score. It gives you advice on how you can build your score.”

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