Protecting Your Financial Future

As they get closer to graduation, college students need to be more aware about ways to manage their finances and build a solid credit history.

Not many students realize that building a good credit history for the most recent seven years is often required to secure a loan for a condo or car. New research shows that 18 to 24-year olds are at the greatest risk for identity fraud, which can potentially impact their credit score and their financial future.

According to the 2007 Identity Fraud Survey Report released by Javelin Strategy & Research, young adults are least likely to utilize important safety measures when it comes to identity theft. Simple precautions such as shredding documents, turning off paper bills and financial statements, or using antivirus, anti-spyware software or firewalls can be critical for protecting your identity. Compared to the overall adult population where 3.7 percent fall victim to ID fraud, a much higher 5.3 percent of 18 to 24-year-olds have fallen victim to identity theft in the past 12 months.

Students are not always aware of the amount of information they leave unprotected for identity thieves. While identity theft has declined since 2006, students still need to take the proper precautions to protect themselves against criminals. By using simple techniques, such as electronic banking and bill payment, consumers can potentially reduce the risk of exposure of personal information.

Some advice from experts includes: Be wary of paper trails you leave behind, as they attract identity thieves. According to Javelin Research, the vast majority of identity theft occurs through traditional methods such as a lost or stolen wallet, or access to account information from trash or mail.

Access to incoming and outgoing mail in residence halls can put students at increased risk. With more than half of all victims knowing their perpetrators, students have to be careful of leaving personal information unattended in high traffic areas such as dorm rooms, living rooms or a student lounge. Don’t just throw out bank statements and pre-approved credit card offers – dumpsters are another way for identity thieves to access this information. Shred those paper bills, statements and credit card offers!

How do college students protect their identities and establish good credit ratings without having to live at home? There are six simple steps they can take with the Internet to organize finances and reduce vulnerability:

• Bank online – many victims of fraud catch it more quickly through electronic banking, by viewing statements and receiving and paying bills online.
• Pay bills on time – according to Fair Isaac, about 35 percent of a person’s credit score is determined by on-time bill payments.
• Eliminate paper trails – replace statements and checks with electronic transactions.
• Sign up for e-bills through your financial institutions – e-bills have the same information as paper bills but are more secure when viewed online. Students can find out where to sign up for e-bills at www.ebillplace.com.
• Check your credit report at least once a year – free credit reports are available at www.annualcreditreport.com or 1-877-322-8228. Check to see that all the accounts listed are yours.
• Keep informed – sign up for e-mail or cell phone alerts to monitor transfers, payments, low balances and withdrawals that will warn you of any unusual account activity.
• For more tips on preventing identity theft, visit www.checkfreecorp.com/idprotect.

Credit history starts now. Knowing how to manage your money early on will secure your finances for the future.

This article was contributed by Lori Stepp, Managing Executive of E-bill Adoption Services for CheckFree.