Credit repair is a strange animal. Often, its strength lies in prevention as well as mitigation. While credit may be the last thing on your young, collegiate mind, taking your first steps into the real world will be easier with the right tools by your side. Sharpen your credit score by adhering to the tips below. Planning for the future starts now.
• Say no to unnecessary loans
The average college kid lives on mac and cheese and only does laundry once a month. Why? Cash flow. Education is expensive and the cost of tuition grows each year. Despite your current financial setbacks, applying for unnecessary loans will only increase the burden down the road. Not only will hefty loans affect your debt utilization ratio, the monthly payments could eviscerate your entry-level salary. Practice responsible borrowing during college to avoid larger problems in the future. Earning a degree should never risk your financial security.
• Don’t go credit card crazy
Sure, you may be broke, but relying on credit cards is not the answer. Say no to preapproved offers that come laced with high interest rates. While a line of credit may solve your short-term problems, charging your way through school will leave you with significant credit damage on graduation day. A good rule of thumb? If you can’t write a check for it, don’t buy it.
• Work and save
Within the caveat of spending comes the proverbial horse to the cart: Working. A part-time job will help you cover college costs and everyday expenses, allowing you to reduce debt and avoid the need for credit repair. If your schedule is tight, consider applying for a Resident Advisor (RA) position or work-study program. College-sponsored employment is often flexible and generous; in fact, the average RA is given free room and board in exchange for peer support. If you can swing it, consider putting the fruits of your labor into an investment vehicle while you’re young. Allowing your money to grow over time will result in bigger payoffs and better financial options. As a cornerstone of healthy credit, saving early can only help you.
• Stop getting ripped off
There are a few university-sanctioned “necessity” items that are not worth the cash. When good credit and savings are paramount, why waste precious funds? Stop allowing your education to rip you off. Learn to save on:
The average student spends more than $400 per semester on textbooks, most of which are sold back at a fraction of the cost. Why lose money when you can borrow the information you need? Check out chegg.com for a Netflix-like approach to textbook rentals. If you can’t find the right book, browse discount sites like ecampus.com or alibris.com. They offer knowledge for less than the average college bookstore.
o Events and organizations
Participating in school activities shouldn’t threaten your bank account, but many events and organizations come with a hefty cost. Before buying season tickets to the football game or rushing a popular fraternity, ask yourself if these frills are worth it. How will the added costs affect your student loans, savings, etc.? Will they add value to your college experience, or will they result in money wasted? While decisions like these aren’t fun, acting responsibly is a part of maintaining good credit. Don’t allow entertainment to trump common sense.
o Campus housing
Campus housing plans usually come with a room, meals, and round-the-clock security. While the perks are evident, the markups are astronomical. According to Scholarships.com, the average housing package ranges from $7,500 to $9,000 per year depending on the institution. If you are in search of a leaner school year, why not find some roommates and share an apartment? Keep your costs low to offset the price of convenience and enjoy the rewards of a smart decision. Money saved means less debt after graduation.
• Check your credit reports
Credit repair begins with knowledge. Without understanding your credit report and its components, you’ll be hard-pressed to maintain a healthy score. Begin your relationship with good credit by getting all the facts. The three main credit bureaus: TransUnion, Experian, and Equifax are required to provide a free copy of your credit report each year. Go the extra mile by talking to a professional about the information you see and how to improve your current standing. Like education, creditworthiness is a lifelong endeavor. Don’t wait to improve yours.