Program to help students understand credit scores

Most citizens are concerned about how their credit score can affect their future so they can start making changes to better manage their money.

The aftermath of poor spending habits, such as holiday shopping sprees or picking up the tab for friends after a night out, could compromise one's ability to obtain a loan for a new car, purchase a home, or even get a job after graduation as many employers now check the credit histories of prospective employees.

Like a college transcript, credit reports will follow students into the post-graduation world, so it is important for students to practice responsible spending habits now.

Stearns County Commissioner DeWayne Mareck, weighed in heavily on the topic of financial literacy among students.

"There should be education that is mandatory for students that teaches them the importance of personal finances. It would be a benefit to everyone especially in today's economy," Mareck said. "Students will only listen to their parents so much. More seem to listen and take the advice of their peers."

With today's economy looking grim, now is the time for college students to control their spending.

"Are You Credit Wise?" is a peer-to-peer financial literacy program developed for college students by MasterCard Worldwide is one way students can learn more about how to manage their personal finances.

Allison Britz a senior at SCSU recently attended an "Are You Credit Wise?" workshop that focused on the responsible use of payment cards, how to obtain and understand credit histories, and the best way to create a budget to get spending under control and build savings.

"If I had known as a freshman that my credit score was so important I definitely would have thought twice about where I was spending my money." Britz said. "I had to learn the hard way."

Britz, like many college students, indicated that she has run into a few financial potholes in the past, but as a result has now learned how to better manage her money.

"I was nervous about my financial situation, especially since I plan to graduate in December. I was unaware of my credit score and even how to obtain it, and I didn't want a prospective employer to know what's in my credit report without me knowing first. Fortunately I attended an Are You Credit Wise? presentation just in time, and am now much more prepared," said Britz.

"Our greatest hope with the Are You Credit Wise? financial literacy program is that it will not only educate college students about personal finance topics, but motivate and influence them to begin practicing responsible spending habits in their own lives," said Patrick Dwyer, MasterCard Worldwide Vice President of Global Public Policy and spokesperson for the Are You Credit Wise? program.

With one swipe of the card, many students fail to keep track of what they've spent their money on. But what many college students may not realize is that a credit card balance is money that has been loaned to you and must be repaid, with interest. Unlike school loans that do not accrue interest right away and can have lower interest rates than credit cards, APR's on your credit card can be higher than student loans, and can even increase if you miss payments or spend irresponsibly. Credit cards can be an effective way to build a strong credit history, but you have to use them responsibly.

"Students should understand that transacting business is loaning money to yourself," said Commissioner Mareck. "Don't buy things to make yourself feel good, you have to be able to pay it off at the end of the month."

With five children of his own, Commissioner Mareck has always stuck to his word.

"If you can't pay off your credit card bill at the end of the month then don't buy it," said Mareck. "Students should know how to use credit cards- and how to budget to afford the things they need, and trim the expense of the things they want- and to buy within those needs."

The Commissioner's lasting words, "There should be mandatory training on money management geared to the proper age, if that happened I think college students would be much wiser users of credit. Let's try and make money management a required part of education in schools."