Students Should Be Wary Of Their Credit

Mostly students worry about their classes and how will they succeed in college, but what happens next after they graduate is just as important. If a person wants to lease an apartment or buy a car, then two types of credit is required.

Some students have already started building up their credit scores by taking out a student loan.

According to Patricia Amann, VP of the First Tennessee Bank at Poplar Avenue and Highland Street, said it’s important for students to have an established credit. She said today even the car insurance companies’ look into a person’s credit score. So, after graduation, people need to buy a decent car, and their parents won’t be available to cosign it for them. But they won’t need that, given that their credit score is good.

Though it’s understandable that having a good credit score is important, it should be handled carefully too. Amann said in her opinion, having a bad credit score is worse than having no credit at all, due to the fact that building credit takes a lot of effort and time, and if something bad, like bankruptcy happens, then that information will stay on the person’s credit report for 7 years.

Amann also gave a few advises on how students can prevent themselves from getting caught in a “bad credit trap”. She said students should talk with their credit card lenders before they sign up for a credit card. She also said students should avoid using more than 50% of their credit limit and to get a credit card that offers the lowest interest rates.

Amann explained students should start building their credit when are at their last year of high school. As people can’t establish their credit until they are 18 years old, there are products that allow them to do so by doing it under their parents’ credit.

Credit isn’t all about spending a huge amount of cash and paying it back, it’s about how diligent are you in paying it back about what you spent.

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