Keep Your Credit Strong While In College

Keep Your Credit Strong While In College
  • Opening Intro -

    College students may find themselves in financial difficulty soon after they start college.

    That may be due to relying exclusively on their parents for support, not fully grasping the importance of pursuing financial responsibility.

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Manage your credit wisely by obtaining your free credit reports.

Spending Habits

Within months of setting foot on campus, some students begin to undertake spending habits that will eventually come back to bite them. These include running up a balance on a high interest rate credit card, overdrawing a checking account or simply spending through the cash allocated to them by their parents.

Even if you’re financially responsible and careful not to take on excessive debt, your personal credit may not be that strong. Every consumer has credit reports on them, information that is developed and maintained by the three major credit reporting bureaus: Equifax, Experian and TransUnion. These reporting agencies simply accumulate data about you that is supplied by your creditors, with each bureau keeping track of your spending habits, your credit payments, debt balances, where you live and work, and more.

Reporting Errors

Guess what? Sometimes the information about you is wrong. Wrong information will effect your credit score and could impact you in many ways including your quest to get a job, find an apartment or buy a new car. That’s very serious, but it doesn’t have to wreck your plans. You should obtain copies of your three credit reports and examine these to ensure that the information about you is correct. If something you find is incorrect, you can request the respective credit bureau to correct your report for free and issue you a new copy.

Every American consumer is entitled to receive one free copy each of his three credit reports annually. By law, all three credit reporting bureaus must give you a copy of your credit report for free when you request it. However, there is only one website where such reports are dispensed to consumers at no charge to them. That website is AnnualCreditReport.com. Ignore the other so-called free credit reporting websites — sure, you may get your reports for free, but there are strings attached. Like, credit monitoring services you probably do not need.

Report Rotation

One good way to manage your credit is to simply order one report from a different credit bureau every four months. By rotating between TransUnion, Equifax and Experian, you will ensure that you won’t have to pay a fee for your reports. Moreover, you won’t find yourself overwhelmed or confused by having to sift through and compare three different reports. Anyway, if you find errors, you’ll have to contact each bureau individually — you’ll be better off concentrating on one bureau at a time.

Your credit score is not included with your free credit report, however. Your FICO score or credit score can be obtained separately and usually involves a fee somewhere between $5 and $8. Is it worth paying for your credit score every once in awhile? Absolutely! That’s because your credit reports impact your score and your score will determine whether you receive credit and at what terms. The higher your credit score, the better for you.

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Categories: College Budgeting