Money

Money matters: 'How I'm figuring out my finances as a student'

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We asked three women to divulge their personal finance diaries over the course of a month while getting to know their credit score. By using CreditWise by Capital One to see their full credit report and score, we’ll see what they learnt about their financial health and how they might be able to improve it. In this installment, student Indiana shares what she’s learned about how she might want to manage her credit score for post-student life. 

Of all the things we learn in schools, managing your finances might be a lot more useful than most - I mean, when was the last time you had to crack out Pythagoras’ theorem at your desk?

But the reality is that it’s not something we get taught, and as a university student I basically had no idea what the deal was when it comes to finances, let alone what a credit score is or means. 

I earn around £400 a month from a part-time cinema job, but with a student loan and no savings, I wanted to know where I stood.

I’ve heard the expression ‘credit score’, but to be honest, I never really thought it applied to me. I’d never checked mine as I didn’t think I needed to, which sounds silly, but I guess I just never thought about it. Throughout the course of the next few weeks, I’ll be using CreditWise in order to check my score.

However, coming up to the end of university, I’m aware I’ll now have to think about trying to set myself up for the future and make sure that I’m in a good place, money wise.

The first step was to figure out how much I spend in a month and then if I could be smarter with my money. 

Right now, I feel just about OK financially. I have enough money to survive, but I haven’t started planning for the future or thinking too much about saving.

I have a student loan which helps massively with living costs. It makes up the majority of my income, supplemented by a part-time job that provides just under half of the additional money I need to get by. 

Although I don’t know too much about it, I know that your credit score can have a big impact on your ability to get a loan or buy a house, so it’s something to start taking real care of.

I don’t think many people my age are aware of the importance of a good credit score, even though it’s something that will be crucial in years to come. So I’ve decided to go all in for a month and find out everything I can.

Week 1

I registered for CreditWise to check my credit score for the first time. It was 372/700 - not catastrophic, but it could definitely be a lot better. 

My phone bill hit me hard this month – it was a lot more than usual as I went over my data allowance. 

Looking at my score and the things CreditWise showed that go into it, it made me realise that it’s the little things - that I might forget about - that build up and that I need to keep more of an eye on.

I need to make sure I can afford things like a big phone bill if it happened– because if I didn’t manage to pay it on time, it could pop up on my credit report and impact my score negatively.

Ideally, a year after leaving university I will have a full-time job that provides enough income to comfortably rent a flat and – if I pass my driving test — enough to put down a deposit on a car, and keep up my monthly payments, too.

For big purchases like a car, they check your credit score to see if they can trust you to make payments. I need to make sure I can pay unexpected bills on time, as well as my other monthly payments, to avoid my score being negatively impacted. That’ll help in setting me up for proving I’m reliable before I apply for something like a car loan!

Week 2

My spending habits have changed quite a bit as a result of being a student. On the one hand, I have had a lot more income in the form of wages and a student loan which makes buying new clothes and going on holiday very tempting.

At the same time, however, I’ve had to try and stick to a budget and spend money on rent and practical things, rather than just the stuff I want.

Doing my weekly shop this week, I notice how much things add up to. 

I’ve decided to try and form better spending habits, like buying food for the week in one go rather than as and when I need it, so that my money goes further. 

I’ve also started getting back into charity shopping and car boot sales, looking for bargains and saving money. I think being aware of my credit score has helped me think more about the way I’m spending and change a few habits to protect my finances in the future.

Week 3

I asked my friends if they’ve heard of a credit score, but they don’t know exactly what one is or how it affects us. 

Honestly, I don’t even think they are aware they have their own credit score. 

Looking on CreditWise, there’s a section that tells me what’s going well for me and things that might help to improve my score. It suggested that to improve my credit score, I should register myself on the electoral roll at my current address. As I can vote, I’m going to register to vote this week!

I never realised something so simple could play a part in being offered a loan or mortgage, or even a new phone contract. I had a quick Google and it’s because lenders perform an identity check using this – who knew!

Week 4

By logging on to CreditWise these past few weeks, I’ve learnt that it’s never too early to start thinking about my future. 

It’s easy to fantasise about a nice house or brand-new car, but I never stop to think about the things I could do right now in order to help that happen. 

It’s also definitely helped me feel empowered and more in control. I found out that for me, something as small as registering to vote at my address will help. Keeping better track of my spending so I can make payments on time means I’ll avoid having marks on my credit report. These kinds of things put me in the best possible position going forward in my life and in keeping my credit score healthy.

I feel independent and self-aware, which is brilliant. I’m going to continue using CreditWise to help me stay on track and build towards my goals.

To find out your credit score, see your full report and find out what’s affecting it for free, visit CreditWise from Capital One