Credit Protection Tips for College Graduates

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College is a great time of life, but the whole purpose for getting that education is to prepare young people for the rest of their lives. What they do during those last couple of college years and the first years after graduation can dramatically influence the rest of their lives.

Money Management Tips
By making wise financial decisions, they can set themselves up for a bright future. Here are some financial tips for college graduates that can put them on the right financial path.

  • Pay off your loans. If you have student loans and debt on your credit cards, get those paid off immediately. Deferments may seem like a good idea, but in the long run, they will be a burden that you wish you didn’t have. If you’re still in school, start paying off debt now — don’t wait.
  • Make a budget. This is something that college students should have been doing from the very first day of school. Budgets are the key to knowing how much money you have, what you’re spending it on, and what you can prepare to do in the future. Without a budget, you will always be wondering why you don’t have any money.
  • Pay on time. Being late on paying your student loans or credit cards can cause you serious problems in the future. What may seem like an insignificant late payment can lower your credit score and impact your ability to get credit for a car and a mortgage.
  • Get your credit report. Reviewing your credit report should help you identify how you are doing with credit and how your previous financial decisions are affecting your current credit score.

Checking Your Credit Score
Your credit report is a valuable document that you should become very familiar with. It contains your credit history and is used by lenders to determine if you qualify for loans. The information contained in your credit report is used to calculate your credit score. Knowing what your credit report contains and how your behavior influences your future credit options is important information to understand.

You can get a copy of your credit report from each of the three national credit bureaus. They receive payment and loan information from all of your credit card companies, your student loan organization, and any other credit you may have.  It may be wise to get your credit score and report several times each year so that you can see how your financial decisions are impacting your score. If you are trying to raise your score, you should do a credit check on a regular basis to help you reach your goal.

Managing Your Credit
Credit is a double-edged sword. Having credit can help you do things that you may not otherwise have been able to do. However, it can also prevent you from doing other things you may also want to do. Having a good credit score is important, but you need to know how to manage your credit so that you improve your score, not lower it.

  • Credit reports.As noted above, check your credit report on a regular basis. This will allow you to stay current on how you are doing with the credit you have. Having a regular credit report monitoring service can help serve as credit fraud protection, as they can help you monitor all of your credit accounts at once.
  • Credit cards. Credit cards for college students can be helpful, but make sure you know what you’re doing with it. Using it in place of cash is fine if you are disciplined enough to pay it off at the end of the month.
  • Pay off loans. If you have student loans, come up with a realistic plan to pay them off quickly. The longer you have them, the longer they will weigh you down. They were a tool to help you get through school, but after graduation, they are a liability that you need to eliminate.
  • Save. One of the best defenses against having credit problems is to save money. Starting out with an emergency fund that allows you to pay for auto repairs or other true emergencies will help you avoid using credit. Once you have an emergency fund established, start building wealth by saving and investing.

Graduating from college is a significant moment in life, and the decisions you make during those first critical years away from school can have a huge influence on your future. Using credit wisely and avoiding problems that damage your credit score are two factors that you can control. By budgeting and having a plan for paying off debts, you can put yourself on the road to success.

Joy Mali is a staff writer on The Washington Times and Examiner. Her work is also published on Lifehack, Yahoo and other mainstream sites. She likes to share interesting tips to help people manage their personal finances & credit.

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