Students are also concerned about unexpected financial needs, the details of paying back their student loans, and the shape of their finances upon graduation. Students overwhelmingly agree that their parents have been good financial role models, and are very inclined to discuss school-related finances. Credit, however, is more of a mystery.
"Interestingly, while students say they have a lot to learn about managing their finances, credit knowledge remains a bit of a mystery to students and parents alike," said
This isn't to say that students aren't interested in their parents' opinions when it comes to things like taking on debt - in fact, 80 per cent of students responded that they ask their parents about the topic, and consult their parents on financial issues on everything from major purchases to investing.
"Maintaining a strong credit score will help students later in life as their goals change from paying for education to buying their first car, starting a business or buying their first home," said Jarman. "It's our job to help people understand how using credit responsibly can help them down the line. Many students get their first credit card when they begin post-secondary education, so this is the time to educate them on responsible credit use."
To help parents and students increase their financial knowledge, RBC is sharing some myths and realities of credit scores.
Myths & Realities of Credit Scores
- •Myth: There is no harm paying your bills late as long as it only happens
Reality: Missing even one bill payment can negatively affect your credit rating - this includes your mobile phone, internet and credit card bills.
•Myth: Applying for a lot of different credit cards doesn't affect your credit score.
Reality: Applying for a lot of different credit cards can hurt your credit score, so don't apply for a card for the free swag that comes with it - it could end up costing you more in the end.
Reality: Your credit rating is based on your record of managing your finances responsibly. Lenders look at how you handle your financial obligations, such as whether you pay your monthly bills on time, carry a balance, or regularly miss payments.
•Myth: Checking your own credit will harm your credit standing.
Reality: Checking your own credit history does not affect your credit rating. In fact, it's recommended that you request a report on an annual basis to check for errors.
•Myth: Asking for lower limit on any credit product will help your credit rating.
Reality: Lenders like to see a big gap between your available limit and the amount of credit you're actually using. Apply for the credit you need and use it responsibly. While it's best to pay off your balance in full each month, you should always make the minimum payment.
About RBC's financial planning advice, resources and interactive tools
RBC's Advice Centre offers advice and tools for students. Interactive tools and calculators provide customized information covering many facets of personal finance, including the Student Budget Calculator and the Debt Reduction Plan. With the guidance of RBC advisors who are available to chat live, Canadians have access to free, no-obligation professional advice about RBC products and services and personalized one-on-one service. Further information is available at rbcadvicecentre.com. In addition, RBC's myFinanceTracker, a comprehensive online financial management tool, offers all personal RBC online banking clients the ability, at no cost, to create a set budget and track their spending habits. As well, RBC Virtual Visa Debit enables clients to pay for online, over the phone, or mail order purchases with funds directly from their bank account.
About RBC Student Finances Poll 2014
The 2014 RBC Student Finances Poll was conducted by Ipsos Reid through a national online survey of 1,180 students aged 17 to 24 and of 971 parents of students in post-secondary school (as of
RBC supports a broad range of community initiatives through donations, sponsorships and employee volunteer activities. In 2013, we contributed more than
Image with caption: "RBC Poll: Are post-secondary students making the grade when it comes to credit knowledge? (