What College Graduates Should Know About Credit. College graduates need a very important kind of credit. They need credit that will speak positively of them and help them in the future. A credit that will enable them to obtain loans, mortgages and many more. How do you get and build this kind of credit?
What College Graduates Should Know About Credit; Getting Credit
The truth is that you need credit to get credit. If you do not have a credit history, It will be very hard to do a lot of things. Those things include renting an apartment, getting a loan or even getting a credit card. Also when you have a stable job, lenders will consider your approval for a credit card since they know you are financially stable.
What College Graduates Should Know About Credit; No Co-Applicant
In case you cannot get your own credit card, don’t ask anyone (parents, friends or roommate) to co-sign the application unless you’re very sure you can make the payments. The fact is that when you miss your payment or pay late, your co-applicants credit score will also suffer.
What College Graduates Should Know About Credit; Secured Card
However, it is very ideal to apply for a secured credit card. Here, you will make a security deposit. You may need to pay an annual and application fee. Carefully review the terms and conditions before applying. If you handle the credit card responsibly, you will build good credit in a few months.
Pay It All
It is advisable to pay everything you owe monthly. When you pay only the minimum amount or some lesser amount you will be paying just too much. Apart from that, you will get interested charges on the outstanding balance, making that expensive good you bought more costly.
Each time you miss a payment, you have incurred further debts; you now owe interest on your outstanding balance, get charged a late fee, and your interest rate can increase. To avoid this, you can set up notifications through your credit card company.
Student Loans in Six Months
Some student loans, the first payment starts six months after graduation. Ensure that you pay them to avoid building a bad credit.
Use Less Cards
Avoid using many cards. Many credit cards lead to overspending and debts.
Also, excessive reviews by your prospective card issuers on your credit report can modestly lower your credit score for about a year.
You have access to a free credit report once every 12 months from each of the three major companies that provide them: Equifax, Experian, and Trans Union. Simply go to annualcreditreport.com and request the reports. Always review the report carefully to ensure that every detail is accurate.
Credit card mistakes like missed payments can affect your credit score for up to seven years. However, there’s no limit to the amount of time that positive information stays on your credit report.