3 Ways College Seniors Can Handle Credit

As college begins to wrap up, you may be deciding what the next course of your life will be. Do you hit the job market head on submitting resume after resume, take the plunge into grad school or do you take an extended vacation in a far off land? Whatever adventure you choose, it is important for you to have a good head on your shoulders especially before you graduate. College seniors should also keep this in mind when it comes to credit.

Being a responsible adult with a college degree means you should also be accountable when it comes to credit. Knowing a few credit tips for your post-college life can help you prepare for major life events after college such as making major purchases like a car or even a house. You may already be familiar with how credit works when you started college, but it wouldn’t hurt to take a refresher course and follow these tips when you enter the post-graduate world.

Using credit reports as a guide

Before you set out to make yourself a credit superstar, you will access your credit report to help you. Your credit report will show you your credit history, from the number of credit cards you have to any student loans you may be paying off. It is a helpful document that can guide you in making wise credit decisions for the future .

While inspecting your credit reports, scan it over and see if there are any errors. The Federal Trade Commission recently did a study and found that almost 5 percent of consumers had at least one sort of error on their credit reports. This can be as simple as a misspelled account name or as major as an entire new line of credit being opened. It pays to look for errors because you don’t want to be held accountable for a error that isn’t your fault. Spending a few minutes looking over your reports will help you in your quest for better credit.

Paying off debt in a timely manner

For many college freshmen, it may be the first time they have ever used a credit card or have taken out any sort of loan. Using a credit card for the first time can be an interesting experience, but your debt will begin to rack up over your college career if you haven’t been conservative with your finances. Chances are you will have an ample amount of debt once you graduate, so your best bet will be to make payments as quickly as you can.

You will want to set up an appropriate schedule to pay back your debt. Credit cards require you to make monthly minimum payments, this is the first step to getting you to pay back your debts in a timely manner. You will want to stay on top of these payments because payment history accounts for 35 percent of your credit report. If you miss a payment you will be charged late fees and your credit score will be knocked down a few points. You should start by paying down the balance that has the highest interest rate. This line of debt will charge you the most fees because of the high interest. Paying off this account first and quickly can help you get the expensive fees out of the way.

Using a credit card minimally

Paying off a heavy set of debt may not be the most appealing thing to do once you finish up school, but it is something everyone has to do. During this time, you will probably have expenses and other student loans to pay off, so finances during this time in your life may be tight. A credit card may not be the best way to pay off these expenditures, but it is still important to use a credit card to build up credit. During this time when you are trying to dwindle your balances down to zero, it may be a good idea to put your credit card away and use it sparingly. Cutting up a credit card is not a good idea, but having self control and only using a credit for minimal purchases can be your best way to curb your spending habits and build credit.

If you consider yourself a habitual credit card user and still want to build your credit card up, you can still store it away, but you may want to use it for a rainy day opposed to all of your purchases. A good plan of action is to only use a credit card for set expenses. You can use it for such necessities as gas or coffee in the morning, weekly expenses that will not drive up your balance and help you build credit at the same time.

Posted in Credit 101
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