If you're a college student, protecting and building your credit is probably one of the last things on your mind. You're too busy studying (hopefully), going to parties and making new friends to worry about your vital personal data being stolen or your credit score.
But, as a Detroit Free Press article points out, ID theft has emerged as a major problem for college students. In the face of this danger, the owners and operators of student housing communities can offer powerful assistance to their residents, whether it's through issuing reminders of simple steps renters can take to help shield their personal information or offering technological solutions that protect that data.
And that's not all student housing operators can do to help their residents enhance their financial well-being. By reporting their positive payment history to the credit bureaus, they can help students build their credit histories before they join the workforce.
Combating ID Theft
About 17.6 million Americans were victims of identity theft in 2014, according to the most recent figures from the Bureau of Justice Statistics. Meanwhile, the Federal Trade Commission received more than 490,000 complaints about identity theft in 2015, a 47 percent increase over 2014. Approximately 14 percent of the complaints in 2015 stemmed from people age 20 to 29, while an additional 5 percent came from those 19 or younger.
Why are college students at such a significant risk of having their identities stolen? Well, for starters, most don’t have any experience with credit history.
“College students are more likely to be hit by identity thieves because they are vulnerable,” says the National Association of Insurance Commissioners (NAIC) on its website. “College students usually do not understand the consequences of identity theft, and they are generally unprepared to protect themselves when the steady stream of credit offers and requests for personal information begin.”
Among the risky behaviors that students too often engage in, according to NAIC: posting sensitive information on social media, using public computers to shop and pay bills, and not shredding bills and pre-approved credit offers before getting rid of them.
With students facing such significant threats, student housing operators have the opportunity to make it a priority to help their residents. To begin with, operators should routinely remind their residents to avoid the kinds of behaviors that increase the risk of ID theft.
But knowing that students may disregard these warnings and that thieves are growing ever more sophisticated, operators can offer residents sophisticated technological solutions that can reduce the risk and impact of ID theft. Greystar is one operator doing this.
Starting this year, Greystar, which manages 11,000 student beds, will offer students the opportunity to subscribe to fraud protection services. Other large owner/operators are considering offering such services as well.
It's no secret how much easier your financial life can be when you're armed with a strong credit history. A good credit score makes it infinitely easier to buy a car, get a home mortgage or lease an apartment home, and to do so on consumer-friendly financial terms.
Unfortunately, many college students leave their alma mater with meager credit histories. Additionally, they often have to pay off significant student loans, which means they're often saddled with poor debt-to-income ratios right out of the gate without positive payment histories to balance things out.
However, some operators are working to make sure that isn't the case with their student housing residents. This year, Greystar and many other management companies will begin reporting their residents' payment history to Experian RentBureau, which in turn provides positive rental payment data to the major credit bureaus.
A pilot study by the Credit Builders Alliance (CBA) demonstrates the significant impact positive rent reporting can have on those with limited credit histories. In the study, which took place during 2013 and 2014, eight affordable-housing operators reported the rental payment history of approximately 1,250 residents. In the end, all of the renters who began the project with no credit score had a high nonprime or a prime score after their positive payment history was reported.
The Right Thing to Do
College is a very important time. It's when young people make the transition from the teenage years into adulthood. It's a period when they make lifelong friends and often find their career calling.
Students should be able to enjoy these special years without the heartache of ID theft and, if they've successfully met the terms of their leases, their credit history should reflect that.
By taking a few steps, owners and operators can enable their residents to reach adulthood with strong credit histories and intact personal data.
Nikki Scheman heads business development for Experian RentBureau.
- Image Alt text: Nikki Scheman, Head of Business Development, Experian RentBureau.