Ask Brianna: I’m 18. Should I Worry About My Credit Yet?

“Ask Brianna” is a column for 20-somethings or anyone else starting out. I’m here to help you manage your money, find a job and pay off student loans — all the real-world stuff no one taught us how to do in college. Send your questions about postgrad life to askbrianna@nerdwallet.com.

Good credit opens up a world you may not have known existed, like Platform 9 3/4 did for Harry Potter.

If you jump on the credit-building train at 18, you’ll have an easier time renting an apartment, getting a car loan and setting up your own cell phone plan when you graduate (though I can’t promise you’ll find butterbeer, like Harry did, at your final destination).

But credit also makes it disturbingly easy to cover the eight pizzas your roommates decide to order.

While independence is your reward for having good credit, not everyone is ready to build it responsibly in college. Know yourself, and choose a method that won’t torpedo your goal as soon as you start.

Why you need credit

A quick primer: Your credit score shows lenders, landlords and financial institutions how likely you are to repay a debt or follow through on your commitments. After you start using credit, you’ll receive a score on an 850-point scale. In general, a good score is 690 or above, but know that it will take time to get there. A score of 650 to 699 “could be considered a win” if you’re in college and you’ve been building credit for a year, says Beverly Harzog, author of “The Debt Escape Plan.”

Having good or excellent credit means:

  • Lower interest rates on credit cards, car loans, mortgages and private student loans
  • Eligibility for premium credit cards with fancy rewards
  • More easily qualifying to rent an apartment
  • Access to utilities without a deposit
  • Cheaper car insurance in most states

It can take six months after opening credit accounts to see your score. Many banks, credit cards and personal finance websites show their members free credit scores.

How credit works

The factors that most influence your score are whether you’ve paid bills on time, how much credit you’re using and how long your credit history is. When you’re in the process of building credit, avoiding negative marks — like late payments — is your first priority.

Rent payments generally won’t affect your credit — unless you don’t make them, which could hurt it. But making student loan or car payments on time will elevate your score. Keep credit card balances low, and don’t carry a balance from month to month, even if it’s small. Consider using the card to make one recurring payment, like your cell phone bill, says Billy Hensley, incoming president and CEO of the National Endowment for Financial Education. Set up autopay from your checking account to cover it.

How to build it

Credit cards probably come to mind first when you think of credit, but they’re just one way to show you can pay your bills on time. And they’re not for everyone.

There are some credit cards out there just for students, but they can be hard to get approved for. Instead, you can become an authorized user on your parents’ card, which means they’ll still be responsible for paying the debt, or get a secured card, which has a low credit limit and requires a deposit upfront.

Before you get a credit card, Harzog says to ask yourself these questions:

  • Do you have a checking account now, or when you were in high school?
  • Are you able to use a debit card without overdrawing your account?
  • Do you save at least some money from each paycheck?
  • Do you keep track of how you spend any income you earn?

If the answers are no, consider building credit another way.

I am a big fan of credit-builder loans. You get a small loan — usually through a credit union or community bank — and the money sits in a bank account while you make on-time payments, building a credit score. Once it’s paid off, the money is yours.

In the end, managing your money sensibly will naturally lead to a strong score.

“It’s far more important to focus on paying bills on time (and paying the credit card bill in full every month),” Harzog says, “than it is to focus on attaining a specific number by graduation.”

This article was written by NerdWallet and was originally published by The Associated Press. 

The article Ask Brianna: I’m 18. Should I Worry About My Credit Yet? originally appeared on NerdWallet.

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What Is The True Cost Of Pet Ownership?

For most pet owners, their furry, feathery, and scaly friends are more than animals; they are family members. This can sometimes mean spoiling them like they would human family members.

With nearly 70 percent of Ohioans owning pets, according to the Ohio Credit Union League’s 2018 consumer survey, that means a lot of funds are dedicated to pets. Of those pet owners, 46 percent said they tend to spend up to $500 annually on pet care and supplies. Another 21 percent spend between $500 and $750, 15 percent between $750 and $1,000, while 18 percent claim to spend more than $1,000 on their fur babies each year.

Expenditures on pets by Ohioans are not far from national averages, according to research from the American Pet Products Association (APPA).

Data from the APPA shows about 68 percent of households in the U.S. – 84.6 million families – own at least one pet. In 2017, American pet owners spent a combined $69.51 billion on their animals. That means each pet-owning U.S. household spent about $822 caring for animals last year.

The APPA breaks pet spending into five major categories: food, supplies (including medicine), veterinarian care, live animal purchases, and pet services (including grooming and boarding). According to the Ohio Credit Union League survey, 51 percent of Ohioans spend most of their pet budget on veterinarian care.

Nationally, most money spent on pets – about $29.07 billion – went toward food in 2017, and $17.07 billion on vet care that same year. Spending on pets in the U.S. is expected to continue to rise. The APPA estimates Americans will spend $72.13 billion on their pets this year, almost $3 billion more than in 2017.

So, how do you continue to spoil your loyal friend without breaking the bank? Here are some money-saving pet care tips.

  • Create a pet budget. It’s easier for owners to save on pet costs if they can see how that money is spent. Try setting up a budget specifically for your pet. Track spending on food, toys, veterinarian visits, medicine, grooming, and boarding. At the end of each month, assess how much money has been spent on pet costs and adjust those categories as necessary.
  • Keep pets healthy. Taking pets to the vet regularly can get costly, with veterinarians charging an average of about $257 for a routine dog visit and $182 for cats. But emergency medical costs are even higher (surgical visits cost an average of $245 for cats and $474 for dogs) and tend to stack up. It’s more cost effective to visit the vet regularly for complete physicals, which include diagnostic tests to detect problems before they’re serious. To help keep pets healthy between vet appointments, make sure they’re getting the correct food and plenty of exercises.
  • Make your own Many of the toys sold in pet stores can be created at home. For instance, cat scratching pads can be fashioned from cardboard boxes and braided towels can replace pricey rope toys for dogs. Sites like VetStreet.com offer creative and simple DIY pet toy ideas.
  • Consider less-expensive alternatives to boarding. Travel with animals isn’t always possible, but boarding can get expensive. Instead, try setting up a pet-sitting system. Offer to watch friends’ pets for free while they’re away in exchange for their pet-sitting services next time you leave town. If free pet care isn’t available, check out alternative boarding options like com or DogVacay.com. These sites connect owners with walkers and sitters who typically charge less than pet daycares.
  • Get help. Pet owners struggling financially have options. Charities like RedRover and The Pet Fund provide grants and money toward veterinarian bills. Meals on Wheels and local pet food banks can help owners struggling to feed their animals. For more pet assistance programs, visit iheartdogs.com.

Learn how a credit union can help you do more with your money by visiting www.aSmarterChoice.org.

Unplug Your Kids from Technology with Summer Camp

Children are increasingly becoming dependent on TV, game consoles, or other electronic devices for entertainment. Summer breaks often means they’ll spend more time in front of a screen. To get your kids outside in a healthy, natural environment, consider sending them to a summer camp. They’ll spend their days being physically active, participate in fun activities that build self-confidence and self-esteem, become more independent, make new friends, and reconnect with nature.

There are over 12,000 camps in the U.S. of many varieties:
• Traditional camps: Usually family-owned and focused on providing outdoor adventures.
• Girl and Boy Scout camps: Great for children wanting to learn more outdoor skills.
• Underprivileged background camps: For children whose parents cannot afford the usual camp fees.
• Day camps: Children attend for the day and return home at night.
• Not-for-profit camps: Run and funded by organizations and charities, there are fewer offerings than those at more expensive camps, but they’re valuable nonetheless.
• Special Needs camps: Children and adults stay in cabins with accessible living arrangements.
• Specialist camps: Catering to campers wanting to learn and practice specific skills, like horseback riding, soccer, performing arts, or science.
• Faith-based camps: Christian and Jewish camps that celebrate and teach their respective religions.

You can find camps on the following websites:
http://find.acacamps.org/
http://www.summercamps.com/
http://www.campchannel.com/
https://www.camppage.com/

Costs vary, but many camps offer early enrollment or sibling discounts, and some will arrange payment plans with parents. Every year, 90% of American Camp Association (ACA) camps offer some kind of financial assistance, often called “camperships.”

If you work, are looking for work, or are a full-time student, and your child is 13 years old or younger, you can send him or her to day camp and deduct a portion of the expense from your taxes. The size of the deduction depends on your income or number of children under 13 you have. For more information, see IRS Publication 503, Child and Dependent Care Expenses at http://www.irs.gov.

It’s always a good idea to save for summer fun so you don’t have to go into debt. Hopewell Federal Credit Union can help you save for camp and other family activities by helping you create a spending plan. Call us today at 740.522.8311 or stop by for assistance.

Copyright 2018 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.