Financial literacy is an important tool for success

By Peter Brooks - Staff Reporter



Understanding and protecting your financial affairs are key life skills, students attending Spring Quarter's First Friday's event last week were told.

First Fridays is a regular series of leadership development workshops offered through the Center for Leadership and Service and Multicultural Affairs. The purpose of the workshops are to build practical leadership skills and the sessions take place on the first Friday of each month. Sessions also include free food.

"Financial literacy and the knowledge students learn is a tool they'll have for the rest of their life," said Jade Chan, CLS Programming and Promotions leadership adviser. "It's not just a financial skill, it's a life skill."

The bulk of the discussion was led by Mariela Barriga, a student success coordinator here at Highline. She led approximately 40 students in a discussion about building and managing financial credit.

All students are on a spectrum in terms of wealth and privilege, or woes in life, Barriga said. 

"Acknowledging what isn't in our control helps remove social stigma for financial woes," she said. "Working hard doesn't necessarily equate to financial stability. I don't see success as moving up the ladder, but more towards our goals."

Achieving those goals requires an understanding about credit. Barriga described how credit reports and credit scores are different. 

A credit report details a person's credit history and is prepared by a credit bureau. Individuals are then assigned a credit score based on the report, she said.

Lenders typically only look at your score to determine a loan applicant's credit worthiness, but they may look at the report as well, Barriga said.

Your credit score is determined by certain percentages. Fifteen percent is from your length of credit history (older is better), 30 percent is your income and debt ratio, 35 percent is from your payment history, 10 percent is new credit, and the final 10 percent is based on your types of credit. 

Barriga advises to make sure your income and debt ratio is always balanced, since this can affect your score in a major way.

Everyone has one credit score with each of the three credit reporting bureaus (Equifax, Experian, and TransUnion). Each score can differ depending upon what information the credit bureau used in its assessment.

Types of credit used in determining your credit score include secured credit (car, home loans), installment accounts, revolving credit, and unsecured credit (credit cards). 

The best way to improve your credit score is to never go over 80 percent of your credit card limit, and spend around 30 percent in order to ensure your score will rise over time. Going over 80 percent lowers your credit score by 30 points each time, Barriga said.

Although they all claim to offer you a free credit report online, Barriga said the only truly free reports are available through www.AnnualCreditReport.com.

Knowing your credit score prior to making a major purchase such as a car can be helpful. 

In-store financing offered by car dealerships often have high loan interest rates. 

"Make a plan before buying a car. It's very rare that someone will walk out without a car," Barriga said.

Free financial help is available for Highline students through the Inter-Cultural Center and free financial advising from coaches at Highline. Check the Highline staff directory and look for these advisers: Deana Rader, Laquita Fields, Jean Munro, Nou Lee, Michelle McClendon, Loyal Allen, Tawnya Lee, and Mariela Barriga to schedule an appointment.

"Our support center is highly motivated, dedicated and caffeinated," Barriga said.

An upcoming financial workshop will take place in the Inter-Cultural Center in Building 8, room 204 on April 17 from 1 to 2:30 p.m.

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