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The most common mistake made by college students that could leave them homeless.

Millennials are the most educated generation however, there is one little thing that is overlooked by almost every college student. This invisible detail could cost them a job, a car or even a house. It has nothing to do with classes, major or even your GPA. Honestly, none of those will matter if this small detail is ignored.

Credit.

Millennials do not give a sh*t about credit and their credit score. The concept of credit creates fear for most due to a lack of formal education on the subject, it is a system set up to be complicated, they see no use for a credit card or they haven’t had to use their credit score yet. But none of these excuses reduce the value and relevancy of credit in your life. Most people start to care about credit when they got rejected for their first apartment or get a ridiculously high-interest rate on a car or house that will cause them hundreds of thousands in interest (i.e. when it’s too late).

According to TransUnion, 43% of millennials between the ages of 18-36 have “sub-prime” credit scores. This means their credit score is bad enough to make it near impossible to get a loan for a car or house in the near future. To put that into perspective, 4 out of every 10 millennials would be SOL if they tried to get a loan or their own place in the next few months.

The length of your credit history (the time since you’ve opened up your first line of credit) accounts for 15% of your credit score. It is imperative that you open up your first credit card as soon as you possibly can to start building credit!

If you’re looking to build credit and don’t know where to start, check out our blog at www.curucredit.com/blog! If you have any questions related to credit, shoot us a tweet or message us on Facebook (@CuruCredit).

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What is the best credit card to start with?

15% of your credit score is based on how long you’ve had credit. The longer you have a credit card, the sooner you start building your credit score, and the sooner your score raises due to older credit. A line of credit (a credit card, loan, etc.) won’t help your score until it has been open for at least 2 years!

“What credit card should I open first to start building credit?”

Honestly, which credit card you choose is up to you (don’t worry, I will provide links to recommendations) and really depends on your current financial and occupational situation, but there are definitely some criteria you want to follow when deciding:

1. As low of a monthly interest rate as possible
2. You want NO annual fees
3. You want to be able to change your initial credit limit
4. Have some sort of incentive for you (usually cash back)
5. Convenient payment option 

The problem is that most credit cards that are advertised as good starter cards with crazy rewards like cash back and triple points also come with a very high-interest rate. What can you expect? You’re a credit baby. Banks make their money from your mistakes.

Certain types of starter cards help you avoid this high-interest rate:

1. Student cards –Generally low-interest rate cards that have low credit limits and minimal rewards

• https://www.nerdwallet.com/student-credit-cards

2. Secured cards – Lines of credit that require an initial deposit of some amount as collateral. If the credit limit is $500, your initial deposit will be $500.

• https://www.nerdwallet.com/blog/top-credit-cards/nerdwallets-best-secured-credit-cards/

3. Credit Unions – Credit Unions are NOT banks. They are nonprofit organizations that offer lower rates and fees than banks.The only problem with Credit Unions is they are regional, so you want to go with the one you have the most reliable access to!

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Don’t be afraid to check your credit score.

The words “credit score” invoke a sense of fear in most who hear it. It’s comparable to hearing “Voldemort”. People are scared of credit. Most people are even scared just to check their score because they believe that will lower it.

This is a complete myth. Checking your credit score online will NOT affect your credit score.

Whenever your credit score gets checked there are two types of inquiries or “pulls”: hard and soft. A hard inquiry will shave off a few points of your score whereas a soft inquiry will not. How so?

When a business or lender pulls a copy of your credit report to follow up on an individual’s application for credit, it results in a hard inquiry. 


This inquiry will show up on your report for the following next two years.
Soft inquiries occur when you check your own credit, or when a person/company checks your credit report during a background check for potential employment. This does not result in a loss of points and is actually encouraged, as it may help you determine if anything is amiss (missing points may indicate fraud) and will keep you consistently updated.