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Student Credit Repair
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:
Tip #80: 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.
In fact, the financial aid offices at most colleges and universities are so useful that you may want to call the school you attended in the past to ask whether alumni are eligible for any services at the financial aid office. The resources that you a get for free from these offices are simply too good to miss.
Tip #81: 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.
Tip #82: 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. Each of these things requires a good credit standing, but too large student loans not only require larger monthly repayments but also may affect credit scores by overextending credit.
As tuition fees rise, larger student loans are becoming the norm, leading to financial hardship down the road for many students. To avoid this, you should take out the smallest loan you can, relying on jobs, savings, scholarships, bursaries, and other forms of financial aid to make up the rest of your tuition and living expenses. You should rely on loans as a last - not a first - alternative.
Student and college loans are an investment in your future since they can help you get the education you need in order to get a great and fulfilling career. However, these loans are a serious and usually long-term financial responsibility. They should not be undertaken lightly. If you need a loan to pay for college, you should get the smallest loan you can and should get the best terms and rates on it possible.
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.
Tip #83: (Almost) never default on a student loan
Many students think that defaulting on a student loan after graduation is a smart way to get rid of a debt. After all, they no longer need the money for school and in fact need the money for settling into a job and new home.
However, defaulting on a student loan is a terrible mistake in almost all cases, because it affects your credit rating very negatively. If you have student loans, it is important that you start repaying them on schedule and that you repay them on time. Doing so will actually improve your credit score.
If you are having trouble repaying your student and college loans, speak to the lenders rather than ignoring the problem. Most lenders will actually give you a six month grace period after graduation so that you can find a job and settle into post-college life before repaying your loans.
If you have several loans, your lenders may be willing to help you pool them into one larger loan payment that requires smaller monthly payments. Some lenders will also give a few months grace in case of unemployment.
Read your loan agreements carefully to find out what your student loans are like and what is forgiven in them. If you need to, work out a different payment schedule, seek out refinancing, or find some other way to repay.
Only default on your student loans as a last resort when you really have no way of repaying your debts. In that finality, be prepared for the decision to affect your credit score quote badly for some time.
Once you default on one loan, it really counts against your credit rating - especially since as a new graduate you do not have a long credit history yet. After all, lenders who see that you have defaulted on one financial responsibility will wonder why you wouldnt default on their loan, as well. After defaulting on your student loan, you may be unable to get credit for some time and you will have to work much, much harder to re-establish good credit.
Tip #84: 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.
Try to take advantage of these offers to make your student money stretch further so that you have take out the smallest student loans possible. Look around to find the best student-deal offers, ranging from travel deals to free tax filing services, available from your campus and from surrounding businesses.
Make use of the free services on campus - such as renting movies for free from the film department or working out in the school gym - rather than paying for these same services outside the campus.
Tip #85: Follow the cash for wants, loans for needs rule
Many students fall in love with their credit cards. Credit card companies know this, too, and routinely heavily advertise on college campuses, even offering students free food or gifts to fill out a credit application. While the convenience of credit cards is tempting, it is a good habit to use credit cards only for major purchases, saving cash for entertainment, food, clothes, and other like items. This is because studies have repeatedly shown that those who pay cash for items routinely spend less than those charging or using debt cards to pay.
Using only cash for entertainment and other small needs ensures you wont spend more than you have to and also ensures that you wont up paying for months for something that is long gone.
Tip #86: Make learning about money a priority
Whether you attend information sessions at the financial aid office, read about money in books, or meet with your banks financial officers, learning how to manage your money is an important part of school life.
For many students, their time away from home is one of the first times they are responsible for finances - including bills. Learning to handle this responsibility well early on in life ensures that you will enjoy a good credit standing your whole life. Learning about money will also help you prevent costly credit mistakes.
Tip #87: Start building credit early - and do it well
Start building credit early - even before college starts, if you plan on taking out college loans. Ask your parents to sign over a bill that you pay on time each month. Get a credit card with a low limit and a bank account that you balance each month. Avoid opening several charge cards at once - not only will they be hard to repay, but having several new accounts when you have a short credit history will actually cause your credit rating to drop. Get a part-time job.
Each of these things can help you establish good credit, high in turn can help you get a good student loan rate. More importantly, establishing credit early will help ensure that you have a long (and good) credit history by the time you graduate from college, which will help you with all your important, large post-graduation expenses.
Fix Credit Rating
For the debt with the lowest number give it the number one.
If that is unclear in their ad you can certainly ask them for that information when you call them. Credit Counseling And Your Credit Report Credit reports are an extremely valuable tool for companies to use when trying to determine an individuals ability to make payments on time and manage their money. Debt and credit counseling services offer professional and timely advice to help save your credit rating, your car, your home, and even your life. Credit counseling companies in a number of states have drawn the attention of the Federal Trade Commissions office which has so far as to shut some of these businesses down completely and others have been fined and threatened with similar action if they do not change some of their practices.
Your goal each month should be to make the minimum monthly payments to all your debt except for the debt that you have that is in the one position.
Benefits Of Credit Counseling Credit counseling services are widely available for those people who have a large amount of debt and are having difficulty paying it back in a reasonable amount of time. Two types of agencies are there in the market - non-profit and those who work against a nominal fee. When you use a debt elimination plan youll find that you are taking concrete steps to reducing and eliminating your debt. Your goal each month should be to make the minimum monthly payments to all your debt except for the debt that you have that is in the one position. There are many ways that you can successfully manage your debt so that you can rebuild your credit rating. Credit reports often have mistakes on them and you are more than welcome to dispute any items you do not agree with.
In return for this debt reorganization plan your creditors agree to stop all collection proceedings and all attempts to seize your assets or garnish your wages.
These are called unsecured debts. Remember that it may take some time and effort but that with a little perseverance you will soon have re-established your credit rating. Just be sure to do your checking first because sometimes credit counseling companies are not what they appear to be. You might want to consider consolidating two or more credit cards if you have them. |
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