Students are increasingly worried about credit repair and credit scores - and for good reason. Student debts are rising and the numbers of students who leave school with ruined credit scores is rising as well. Many experts blame larger credit card debts and rising tuition costs (that lead to larger student loans).
Despite the pressures of today's student life, it is possible for college student to leave school financially sound and in fact to develop good financial habits that can lead to a lifetime of financial success. By following the free credit repair advice in this article, college students can learn tips that can make the college years a credit-booster instead of a credit disaster:
Free Credit Repair Advice Tip #1: If you are a student (and especially a student with student loans), budget carefully.
Student loans need to be paid back and are more and more often for large amounts. Sticking to a budget can help you to establish good credit habits that can help ensure that you have a good credit score when you leave university.
Free Credit Repair Advice #2: If you can, never default on a student loan.
Many students think that defaulting on a student loan after graduation is a smart way to get rid of a debt. After all, they no longer need the money for school and in fact need the money for settling into a job and new home.
However, defaulting on a student loan is a terrible mistake in almost all cases, because it affects your credit rating very negatively. If you have student loans, it is important that you start repaying them on schedule and that you repay them on time. Doing so will actually improve your credit score.
If you are having trouble repaying your student and college loans, speak to the lenders rather than ignoring the problem. Most lenders will actually give you a six month grace period after graduation so that you can find a job and settle into post-college life before repaying your loans.
If you have several loans, your lenders may be willing to help you pool them into one larger loan payment that requires smaller monthly payments. Some lenders will also give a few months grace in case of unemployment.
Read your loan agreements carefully to find out what your student loans are like and what is forgiven in them. If you need to, work out a different payment schedule, seek out refinancing, or find some other way to repay.
Once you default on one loan, it really counts against your credit rating - especially since as a new graduate you do not have a long credit history yet. After all, lenders who see that you have defaulted on one financial responsibility will wonder why you wouldn't default on their loan, as well. After defaulting on your student loan, you may be unable to get credit for some time and you will have to work much, much harder to re-establish good credit.
Free Credit Repair Advice #3: Make learning about money a priority.
Whether you attend information sessions at the financial aid office, read about money in books, learning how to manage your money is an important part of school life.
For many students, their time away from home is one of the first times they are responsible for finances - including bills. Learning to handle this responsibility well early on in life ensures that you will enjoy a good credit standing your whole life. Learning about money will also help you prevent costly credit mistakes.
Free Credit Repair Advice #4: Learn financial management skills early - and do it well
Learn financial management skills early - even before college starts. Ask your parents to sign over a bill that you pay on time each month. Get a prepaid debit card and start learning how to manage your expenses on a limited budget. Avoid getting a credit card - not only can they be hard to repay, but if mismanaged, they can ruin your credit score. Get a part-time job.
Each of these tips can help you establish a good credit score. More importantly, establishing good financial skills early will help ensure that you have a long (and good) credit history by the time you graduate from college.