By Alex Merritt

Matt Dunavant has had a credit card since he was a teenager in high school.

The fourth-year economics major at the University of Georgia said he only uses it for large expenses, such as paying for housing when he interned in Charlotte, North Carolina, last summer.

Dunavant said he got his credit card when he opened his first bank account and makes sure to have it with him whenever he travels.

“I started working and so began getting checks,” Dunavant said. “So, I needed a bank account to deposit in, and the credit card just sort of came along with that naturally.”

Credit is important for any person to develop as they make important decisions in personal finance. In order to make large purchases like a house, car or even a phone, one needs strong credit to obtain loans used to pay for these things.

Dunavant said it’s important to start building credit as early as you can, especially while you’re in school, so that one can make informed financial decisions in the future.

“If you’re earning money, I do think it’s a good idea to start building some sort of financial literacy and have some background in credit so that you can buy a car or put a deposit on an apartment once you graduate,” Dunavant said.

Dunavant traced his knowledge about credit to conversations with his father in high school, and said he still turns to his father for advice or to answer questions about finance.

“I’ve been able to have very open conversations with my dad about topics such as building credit, which has helped a lot,” Dunavant said.

There are multiple ways to establish credit, according to Michael Rupured, a senior public service associate and extension financial management specialist at UGA’s College of Family and Consumer Sciences.

Rupured said that becoming an authorized user on a parent’s account is one option, while obtaining a secured credit card is another. Secured credit cards differ from a traditional credit card, in that you’re paying a balance to a financial institution as collateral before getting the card.

For example, a secured credit card with a $500 balance requires an equal deposit to obtain the card. Rupured added that a secured credit card is the easiest way for a student to establish credit. If payments are made on time for a specified period, the secured credit card will eventually convert to a traditional credit card. He advised students to obtain credit cards through financial institutions.

Rupured said it’s important to have good credit so that you can buy a car or a home, which both are impractical to pay for with cash.

“It’s all about options, and money gives you options,” Rupured said.

Rupured then explained credit scores, which is a numeric expression used to represent a person’s creditworthiness. Credit scores are influenced by five different factors, each weighed differently.

According to Rupured, payment history is the most influential factor on a credit score. Making payments late or defaulting on loans can do great damage to one’s credit score.

“The single most important thing you can do to build your credit is to make your payments on time,” Rupured said.

Rupured added that debt is acceptable if you’re financing an asset such as a home, and for students, that can also be expanded to include an education. He said that credit has both positive and negative aspects but is necessary in personal finance.

“There’s good uses and bad uses of credit,” Rupured said. “But you can’t get credit without credit.”

Alex Merritt is a journalism student at the University of Georgia. The reporting for this article was completed before the campus closed due to the COVID-19 pandemic.