Money tips for students

Halen Doughty

Students should learn about credit scores, according to KHEAA. High school graduates heading to college may not have any credit history, and student loans could be the first debt they take on. That's why Vice President of Government Relations Erin Klarer said students should learn about credit, interest, and debt.

Your credit score is a three digit number that has a long-lasting effect on your buying power. Credit scores are checked when applying for credit, and the higher the score, the better the chance of being approved. Klarer said if a student defaults on their student loans, it could have long-lasting impacts on their credit and affect their ability to make purchases later in life.

"Some of those consequences of default does affect their credit score," said Klarer, "and that credit score might be used for applying for certain jobs, applying for a cell phone or car loan, or getting an apartment."

The most widely accepted scoring method comes from FICO, ranging from 300 to 850. Payment history makes up 35 percent of the score, while 30 percent is based on outstanding debt. Fifteen percent is based on how long you've had credit, and 10 percent is based on new credit. The last 10 percent comes from credit you currently have.

KHEAA is working to educate students about credit scores and the impact it can have on their financial futures. Klarer said lenders used to be responsible for educating students about loans, but that responsibility has since been handed off to the schools. The group has 13 outreach counselors that cover every corner of the state, traveling to middle and high schools to teach kids financial literacy.

"If they do default on that loan, the lender has the ability to garnish wages and their tax returns," said Klarer. "We want people to be aware of the responsibility of taking out a loan."

KHEAA is a public, non-profit agency established in 1966 to improve students’ access to college. It provides information about financial aid and financial literacy at no cost to students and parents. For more information on credit scores, interest rates, building credit, and making a budget, visit, or click here for a guide to building credit with credit cards from Credit Card Insider.

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