UCU No-Fee Credit Card – Helping Students Age 18-24 Build Good Credit

 

You are about to start a new journey as a university or college student with exciting prospects ahead. Your area of study will set the stage for your career and the financial choices you make as a student will lay the foundation for your financial future. Make the right choices early on and enjoy the many benefits for years to come.

Build a Good Credit Score

Building a good credit history is one of the most important things you can do for yourself and your financial future. A good credit score can help you get approved for a mortgage, car loan and credit cards – it will also help you when applying for certain jobs, a new apartment, car insurance, utilities and even mobile phone plans.

The sooner you start building your credit history, the more time you have to build a great credit score.

Here are some tips to get you started.

Get a Credit Card

If you are enrolled in a post-secondary institution and you want to build a good credit rating, using a credit card responsibly is a great way to start.

Students may apply for a No-Fee Mastercard from UCU which has a relatively low credit limit and no annual fee. The UCU Collabria Cash Back Mastercard® offers cash back for certain purchases making it an attractive first credit card for students.

More information about UCU Credit Cards can be found on our website.

Apply for a UCU Collabria Cash Back Mastercard® online.

Learn How Credit Scores are Calculated

Your credit history can reveal a lot about you to a potential financial lender, landlord or employer. A good credit score will help you get a loan with better interest rates and a bad credit score can hinder your chances of being approved for a loan.

Here is how your credit score is calculated.

• Payment History - 35%. Your payment history is just like it sounds – it’s your history of repaying your debts. It includes the number of times you made on-time monthly payments and a list of your late or missed payments.

Takeaway – Strive to make your payments in full each month or at least make the minimum payment and avoid late or missed payments.

• Used Credit vs. Available Credit - 30%. This is the amount you owe compared to the credit you have available. Also known as the credit utilization ratio, it is the amount you are currently borrowing divided by your credit limit. As your credit utilization increases, your credit score can go down. Lenders view high credit utilization as a risk for defaulting on a loan because a significant portion of your monthly income is going towards paying your debts.

Takeaway – Keep your credit utilization below 30% to prevent your credit score from going down. For example – if your credit limit is $1000 then your monthly purchases should be typically below $300.

• Credit History - 15%. This is how long you have credit – including how long your oldest and most recent accounts have been open.

Takeaway – A long credit history signals to creditors that you can responsibly handle your credit accounts over time.

•  Public Records - 10%. This is a list of bankruptcies or collection issues related to you not paying your monthly balances.

Takeaway – Strive to have this section empty as any recorded issue may have a significant negative impact on your credit score.

• Inquiries - 10%. Anytime your credit file is accessed for any reason, the request for information is logged on your file as an inquiry. Too many inquiries for your credit information can lower your overall credit score. 

Takeaway – Limit the number of times you apply for a credit card or other credit.

Pay off Your Balance Every Month

If you can, pay off the entire balance of your monthly statement – this will help you maintain a solid payment history. Pay at least the minimum amount each month on time to avoid late or missed payments that will negatively impact your credit rating.

Make Regular Payments on Your Other Loans

Make regular payments on a student line of credit or student loan. Loan repayments show up on your credit report history and contribute to your overall credit rating. A late or missed payment can result in a lower credit rating,

Don’t Apply for Too Many Credit Cards at Once

Applying for several credit cards at once can lower your credit score since new credit inquiries make up 10% of your score.  

Check Your Credit Score

Monitor your credit score to check for any errors that could damage your credit rating. There are two main credit bureaus in Canada: Equifax and Transunion. Contact one to request your credit report.

For more information visit your local UCU Branch or make an appointment online to speak with one of our loan experts.

 

UCU Student Line of Credit

Attending university or college is already expensive and the cost of post-secondary education is expected to increase year after year, outpacing inflation. As a student, you have a lot of responsibilities, including planning to pay for your education. Along with your studies, you also need to budget for things like tuition, books, transportation, and in many cases housing and food. For those pursuing graduate or professional degrees, the cost may be significantly higher.

If you need help managing your expenses related to post-secondary education, we can provide some assistance with our UCU Student Line of Credit.

What is a UCU Student Line of Credit?  

A UCU Student Line of Credit is a flexible, low-cost option to help you pay for your university or college expenses. You can borrow just the amount you need, when you need it, making interest-only monthly payments up to one year after leaving school.

How Does a Student Line of Credit Work?

Qualifying UCU student members will have access to a line of credit with a preset credit limit. Once approved, you will have the option to borrow as little as you need, or up to the full amount of your preset credit limit. While enrolled in school, you will make interest-only monthly payments on your loan. Repayment of the principal amount borrowed will start one year after you graduate.

For example, if your UCU Student Line of Credit is $10,000 and you borrow $4000 to pay for expenses - you will be left with $6000 in credit to use if needed. While enrolled in school, you will make interest-only monthly payments calculated on the $4000 borrowed – not on the total $10,000 of your student line of credit. One year after you graduate your total monthly payments will be calculated on the $4000 borrowed plus interest. 

How Much Can You Borrow?

If you are approved for a UCU Student Line of Credit, your preset limit will be determined by your program of study. Undergraduate students can borrow as much as $40,000 while students enrolled in medical or dental school can borrow upwards of $275,000.

The maximum credit limit will be made available in equal installments for each year of study. For example, a $40,000 credit line for an undergraduate degree will be made available in $10,000 increments in each of the 4 years of study.

A full list of UCU Student Credit Line limits can be found here.

Competitive Interest Rates Based on Your Program

The interest rate for medical and dental school students - UCU Prime Rate  

The interest rate for all other professional and graduate programs - UCU Prime Rate + 1%

The interest rate for undergraduate programs – UCU Prime Rate + 2%

Line of Credit Repayment Grace Period

UCU offers a 12-month grace period on the repayment of the amount borrowed – the grace period is 6 months if you withdraw from school early. While you are enrolled in school, you will make interest-only monthly payments.

Manageable Repayment Schedule

After the 12-month grace period, you will start making monthly payments on the principal money borrowed plus interest. UCU offers the option of keeping the original line of credit agreement or converting the amount owed into a blended payment personal loan. A UCU loan expert will help you determine which repayment option is best for you.

How to apply for a Student Line of Credit?

If you are a UCU member and enrolled in a post-secondary institution, you can apply for a UCU Student Line of Credit. You will need to provide proof of enrollment and a statement of tuition and residence fees. In some cases, you might need someone to co-sign your agreement who consents to make your monthly payments in case you are unable. The co-signer, who is usually a parent, must provide proof of employment.

Talk to a UCU Loan Expert

Book an appointment online to talk with one of our loan experts. Come in with your co-signer and bring all necessary documents with you to your meeting. Our loan experts will work with you to come up with a line of credit agreement that will help you pay for your post-secondary education expenses.

More information about UCU Student Lines of Credit can be found on our website.                      

 

 

 

 

 

 

 

 

 

UCU Youth Unlimited Account – Much More Than a Savings Account

The UCU Youth Unlimited Account is more than just a bank account – it will help you learn about the importance of saving, the benefits of earning compound interest and the many lessons of financial literacy.

Available for Canadian citizens or permanent residents up to the age of 24, who attend school full time, this account will provide all the banking services you will need to develop lifelong healthy financial habits.

UCU Youth Unlimited Account Benefits

Account Features

UCU automatically adds new benefits to the Youth Unlimited Account at three distinct age points.

Common Account Benefits: 

• Free deposits and withdrawals
• No monthly maintenance fees
• No minimum balance required
• Preferred interest on the first $1,000 

Age 11 - Benefits Added:

• Free UCU Youth Unlimited Debit Card
• Free deposits and withdrawals at UCU & The EXCHANGE Network ATMs
• 3 Free ATM withdrawals at any bank 

Age 16 - Benefits Added:

• Free personalized cheques
• Free unlimited chequing
• Free bill payments

Age 18 - Benefits Added:

• UCU Mastercard (upon approval)
• Student Line of Credit (upon approval)
• Opportunities to apply for UCU scholarships

Convenient Banking

• Three ways to bank - visit a branch, use the nearest UCU or Exchange Network ATM or use UCU Online banking
• Sign up for ucublu, our online-only bank account
• Download the UCU APP and use a phone or tablet to conduct banking transactions 

Financial Literacy

With a UCU Youth Unlimited Account, you will gain a better understanding of finances. You will watch your money grow with the benefit of compound interest, learn to use a debit card responsibly and get a head start on better money management.

Develop a Relationship With UCU

The Youth Account will provide a springboard for you to develop a personal relationship with UCU branch staff. This will demystify the banking experience and give you access to products and services targeted for students such as UCU Student Lines of Credit which is available to eligible post-secondary students to help cover the cost of education and living expenses. Read more about UCU Student Lines of Credit and how you could benefit.

Eligible for UCU Scholarships

Every year, UCU offers a selection of scholarships for post-secondary students geared towards a specific area of study. To be eligible, you must be a member of UCU for at least two years.  

Read more about the UCU Scholarships program and how it could help you.

To open a Youth Unlimited Account please visit your nearest UCU Branch.