College Students and Money: A few more things

This is the fifth and final in a series this week about financial issues faced by students in college and trade school.

The list of financial topics that are important to students and other young adults is potentially endless, so please don’t assume that I’ve covered everything this week. Whether we are age 20 or age 60, we always need to keep learning about finances, because the financial world keeps changing – and our needs keep changing too. I’m wrapping up this series with brief notes about three more issues I see as critical for students.

Organizing Important Documents. Keeping important documents in a safe place where you can find them easily if needed is a critical skill to learn. And it is important for all key documents, whether they are paper documents, or electronic documents. Examples of important documents include:

  • Financial records of all types – financial aid papers, loan papers, receipts for major payments (tuition, rent),
  • Documentation of required educational costs, because you may be eligible for tax benefits,
  • Legal contracts (e.g. lease, cell phone plan contract) and documentation of pre-existing damage in a rental unit or dorm room,
  • Tax documents, including prior-year tax returns and documents, along with current-year W-2 forms and any other income records, as well as other year-end tax forms received.

I will not pretend this is a comprehensive list. General rule: if you think it might be important, keep it, at least until you can ask someone trustworthy about it. And I don’t mean just keeping it all laying around your room. We want these documents in a safe place where you can find them. That means they should be enclosed (in a box, or an envelope, or a designated drawer), and ideally they would be sorted into groups or sections or folders so you don’t need to look through all 500 documents to find the one you need. On your computer, you need a folder for important documents, probably with several sub-folders.

Protecting Personal Information. This means never giving out key personal information (social security number, birthdate, financial account numbers, and more) without making sure the person who is asking has a good legal reason to need the information. You will generally need to give your social security number for financial accounts, formal academic records, and medical records.

Additionally, only give that information to people when you know for sure they are who they say they are. That means if you receive a phone call and the caller says they are from your bank, don’t assume it is safe. When people call you, there is no way for you to know who they really are. Instead, use the number you already have on file for your bank and call them. Make caution your middle name when it comes to key personal information.

More: What to Consider When Sharing Your Data (Consumer Financial Protection Bureau)

Using Credit Cards Wisely. We could write a whole series on credit cards – and you can search the MoneyTip$ blog for other articles – but I want to focus on three main points:

  • College is an opportunity to build credit. You can do that by getting credit card and using it. College is a time when credit cards want you as a customer – later in your life, it may be more difficult to obtain credit. So go ahead and open one or two credit card accounts, avoiding cards with annual fees. Then use them. It is only by using your credit cards and paying the bills promptly that you create something extremely valuable: a solid credit history.
  • Surprise credit card bills can kick off a downward financial spiral. Therefore, keep tabs on how much you have charged to your card since the last bill. Keep a record on your phone, or on your whiteboard, or in a notebook or your checkbook – it doesn’t matter where you keep the record. Just make sure you’re prepared for the bill when it comes.
  • Credit is generally free if you pay the bill in full each month. Assuming your card has a grace period and no annual fee, you will pay no interest at all on your purchases if you pay the entire balance before the due date each month. Sure, the bill says you only need to pay $25, but as soon as you carry a balance forward to next month, you start accruing interest on every purchase you make.

An ounce of prevention is worth a pound of cure, right? These three habits – organizing documents, protecting personal information, and using credit wisely – will dramatically reduce the number of financial “bumps in the road” you’ll experience during college and throughout the rest of your life. You’ll never regret building these helpful financial habits.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Your Credit Report

Have you looked at your your credit report in the past year?   Consumers fought for the right to a free credit report each year, so we should all make sure we take advantage of that right!

To get your free credit report from each of the three major credit reporting agencies (Equifax, Experian and TransUnion),  go to www.AnnualCreditReport.com or call 877-322-8228.  This is the ONLY source for the free credit reports that are yours by federal law.

There are other sources out there – copycats. Over 130 companies claim to offer free credit reports – and some do.  Generally, however, there are strings attached. Some provide a “free” report only if you buy products or services. Others say they’re giving you a “free” report and then bill you for a monthly subscription which you will need to cancel. Remember that www.AnnualCreditReport.com is the real free site.

Getting your credit report isn’t enough.  Read through it carefully to check for inaccurate information. Errors can occur.  And in this age of identity theft, information on a credit report is often a person’s first clue that someone else is using his or her identity. With each credit report you will receive information on how to dispute inaccurate information and correct errors.  Move quickly to dispute any serious errors, such as:

  • accounts that aren’t yours;
  • reports of late payments when you paid on time;
  • bankruptcies older than 10 years (they should be removed after 10 years);
  • accounts that were wiped out in bankruptcy but are listed as still due; and
  • other negative information that’s older than seven years (the seven-year clock starts 180 days after the account went delinquent).

Remember that the information on your credit report will determine whether you can get credit in the future, and on what terms.  In addition, credit report information is considered by prospective landlords and employers, and by insurers deciding whether to provide coverage and what premiums to charge. So it’s very important to make sure the information is accurate.  Mark your calendar each year, so you remember to check your credit report!

Susan

(Edited: 2/2/2020)

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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More Than One Credit Report?

You have more than one credit report.  Yes, you know about the three credit reports that come from Equifax, Experian, and TransUnion.  By calling 1-877-322-8228, you can annually check your credit report for free.  But there’s more…

There are two specialty reports that are free, too. 

1) Your medical records can be obtained from www.mib.com or 1-866-692-6901. MIB stands for Medical Information Bureau.  This organization provides information to insurance companies making underwriting decisions or checking for fraud.

2) Comprehensive Loss Underwriting Exchange (CLUE) is a credit report used by insurance companies, landlords and employers. Request your report at https://personalreports.lexisnexis.com/ or 1-877-448-5732. In compliance with the FACT Act, you can request one FREE report during each 12 month period. Your CLUE report actually includes three different reports: 

  • Insurance Report — contains information provided via our C.L.U.E. report for auto and property records.
  • Employment History Report — contains information relating to your employment history.
  • Resident History Report — contains information relating to your tenant history.

These reports are different than your credit report   The CLUE report predicts whether you will file a claim on an insurance policy, and can impact your ability to rent an apartment, get a job or purchase insurance.

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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