Tips For Parents to Nurture Credit Responsible Students

WASHINGTON (July 25, 2007) - With approximately 7.5 million students exchanging the comforts of home for the freedom and responsibility of living on their own at college campuses, Americans Well-informed on Automobile Retailing Economics AWARE, a consumer education non-profit specializing in auto finance education, reminds parents to have "the talk" with their kids. Specifically, AWARE advises that college students should be reminded to be safe and responsible with their credit -- particularly if they're thinking about buying a car or truck in the future.

"The decisions young college students make today will affect the rate at which they can finance a car or truck tomorrow," said Eric Hoffman, spokesman for AWARE. "Because credit history plays such an important role in determining the annual percentage rate of any form of credit, demonstrating responsibility with credit as a freshman or sophomore says an awful lot to a financing company. It's a lot easier to establish good credit initially than repair bad credit later.""

A host of tools, calculators, articles and other resources to help consumers sufficiently prepare for their auto financing decisions, in either English or Spanish, can be found in the "Auto Financing Learning Suite" section of AWARE's Web site, www.autofinancing101.org. A number of tips in the for parents to share with college students considering financing their first car or truck are included, such as:

* Build a budget with your kids: Help your student determine a price range and make them stick to it. Remind them to factor in vehicle related costs outside of the monthly payment, such as insurance, maintenance and gas costs. 

* Have your kids check out their free credit report: Because credit history affects the a person's annual percentage rate (APR), it's always a good idea to see what finance companies will see when judging credit worthiness. Help your student get a free copy of his or her credit report, so as to correct any errors and take other steps to improve their credit score before getting their heart set on a vehicle.

* Shop around for financing: In this highly competitive marketplace it's smart to check APRs and other financing terms from multiple financing sources, such as dealerships, banks, credit unions, and other financing companies. 

* Be "In The Know": Help your student learn the lingo so they can "talk the talk and walk the walk" when making what is likely the largest financing decision of their young life. 

* Understand How to Build Credit: First-time car buyers will likely hit obstacles that those with more established credit histories won't face. Talk with your student about the pro's and con's of you or another credit-responsible adult being a co-applicant, which may help secure a more competitive rate. In addition, many finance companies offer first-time car buyer programs that take into account other good credit behaviors, such as rent and utilities payments, that might not be showing up in an early credit user's credit score.

* Ensure your kids make their payments on time: Late or missed payments incur late fees and can even cause the vehicle to be repossessed, permanently. A bad payment record will also appear on his or her credit report, damaging an ability to get credit in the future.

(Source: AWARE)