Students are increasingly worried about credit and credit scores – and for good reason. Student debts are rising and the numbers of students who leave school with ruined credit scores is rising as well. Many experts blame larger credit card debts and rising tuition costs (that lead to larger student loans).
Despite the pressures of todays student life, though, it is possible to leave school with a good credit score and in fact to develop good financial habits that can lead to a lifetime of good credit ratings. There are a few tips that can make the college years a credit-booster instead of a credit disaster:
If you are a student, you have a great secret weapon for credit repair and credit help – your schools financial aid office.
If you are a college student, your schools financial aid office should be one of your first stops at the campus. Few students visit this office regularly while they are in school, and this is a mistake. The financial aid office at most universities and colleges has more than enough information to help you keep your credit score in tip-top shape.
The financial aid office offers one-on-one financial counseling, information about scholarships, tips on budgeting, books on money, and many more resources. The officers at your university or college financial aid office can offer you help on almost any aspect of financial help – including helping you figure out credit scoring. Plus, many financial aid offices have workshops that can teach you about dealing with money and credit, and even offer free tax filing services, services that are extremely useful.
If you are a student (and especially a student with student loans budget carefully.
Student loans need to be paid back and are more and more often for large amounts. Taking out the smallest loans you can and sticking to a budget can help establish good credit habits that can help ensure that you have a good credit score when you leave university. Plus, since student loans are for a limited amount, you can easily budget because you will know exactly how much money you will make each month and how much money you will be spending on student housing, tuition and other expenses.
Try to pay for education through means other than loans.
Student loans are becoming a problem for more and more students. On the one hand, student and college loans can help students who could otherwise not afford go to college or university.
On the other hand, though, huge student loans can be a terrible financial burden after graduation.
While it is true that most college and student loans do not have to be repaid until after graduation, the time after graduation usually carries some large financial responsibilities. Many college graduates want or need a car, a good job, and possibly a house or home.
In general, need-based government-subsidized student loans generally offer the best terms and rates. After that, college and student loans from private lenders may offer decent rates. Personal loans and credit cards should only be used when absolutely necessary to pay for an education, as these tend to have higher interest rates and require that you start repaying them right away.
Save money by taking advantage of student discounts or student life
One of the advantages of student life is that it is inexpensive. Student housing or rooms rented with roommates create inexpensive living, on-campus facilities offer great services at discount rates, and many businesses offer student-only deals.
Start building credit early – and do it well
Start building credit early – even before college starts, if you plan on taking out college loans. Get a credit card with a low limit and a bank account that you balance each month. There are many different types of college student credit cards available.