Score with credit

"Well I was shopping for a new car, which one's me? A cool convertible or an SUV? I didn't know that my credit was whack, now I'm driving off the lot in a used subcompact."

This and other catchy jingles from the freecreditreport.com commercials try to convince people that knowing their credit score will help them with things like buying a car, keeping their identity safe, or buying a home.

According to Joel Barrow, a mortgage banker for Utah Financial, the point of a credit score is to determine how likely the individual is to repay their debt, according to the agreement with the lender.

He said the most important parts of a credit score are payment history, what type of credit is being used, and how much is being used.

Credit scores can be checked for a number of things. Dalene Toth, who works for Weber State Credit Union in the WSU Union Building, said the main reason banks and credit unions look credit scores up to is to determine interest rates on loans. Besides lenders, credit scores are also checked by landlords and even employers.

Many college students, however, don't have credit, and out of those who do have credit, many don't know what their score is.

"Most people don't even know what a credit score is," Toth said, "or how they even get one."

According to Barrow however, knowing one's credit score can be vital.

"It's never been more important to monitor your credit well and build a credit score," Barrow said.

There are many ways to start building credit. One thing Toth suggested is having a co-signer on a loan.

Cory Harrison, a WSU sophomore, is starting to build his credit in that way. Harrison just bought a new car, but because he had no credit, he co-signed with his father. He said that because he got his father to co-sign with him, he could have his name on the loan and start building up his own credit.

Harrison even checked into getting a loan without a co-signer.

"Without my dad co-signing," he said, "I was able to get approved for a $3,000 loan."

However, he said that not only was it a small loan, the interest rate on it would have been 11.3 percent, opposed to the 4.9 percent on the loan with his father.

Recent WSU graduate Andrea Roskelley started building up her credit in the same way, through an auto loan.

"I didn't have any credit before that," Roskelley said, "so I think I did have to have a co-signer." She said she didn't know what her credit score was throughout college, and the first time she found out her credit score was when she got a background check to rent an apartment. Roskelley said she has good credit, and knows it's good because she is responsible and pays her bills on time.

Besides co-signing to build up credit, Toth also suggested small credit cards or a shared secure loan. This type of loan allows the person to borrow up to the same amount in their account.

Barrow suggested using different types of credit, not just credit cards.

"Have more credit available to you than you use consistently," Barrow said.

He warned against maxing-out one's credit and to pay more than the minimum payments.

But possibly the best advice to follow is to be responsible.

"The best way to establish good credit is to use it responsibly," Barrow said. "Only use credit and seek to obtain it in a responsible and measured way."