Now that it's just about the start of August, many young adults across the country are likely gearing up to head off to college, either for the first time or for another year of school. And while they may think they have everything they need for the coming semester, there may be one very important consideration they could be overlooking.
Once all the other preparations have been made for a successful first half of the school year, college students should also take the time to order copies of their credit reports. The simple fact is that most young adults may think they know about how their finances work — and usually they are aware of a few basics like not spending too much money and trying to avoid debt whenever possible, though there may be a gap between that knowledge and actual practice for more inexperienced college kids — but when it comes to credit, most don't know much.
Where college students can start
The most important thing for young adults to know about their credit reports is that these documents are essentially a summary of all of their borrowing histories, laid out on one piece of paper. Usually, they will show all accounts listed in any person's name, as well as details about those lines of credit, such as how much is owed and their payment history. All of this information can be used to see where a person stands and whether they will need to do any work to get their standings up to speed.
Of course, studies show that relatively few people take the time to order copies of their credit reports and, anecdotally, this may be particularly true of younger people who have extremely limited borrowing histories. Often, this lack of familiarity with the ins and outs of healthy borrowing habits — which certainly include regularly ordering credit reports — is what prevents young people from checking the documents. In fact, some might not even be aware that federal law now allows consumers to order three free copies of their credit reports every year, one from each of the three major credit reporting bureaus. Further, some states even take those requirements further, allowing for additional free copies in some instances.
All that any person, regardless of their age, needs to do to obtain such a document is visit the federal government's AnnualCreditReport.com website and click through the proper options to order a copy. At that point, the documents can either be sent via mail as a physical piece of paper, or viewed online.
Some college students, though, may not know why they should check their credit reports at all, but doing so will help them to ensure that whatever accounts are listed in their names are all as they should be. For instance, most young adults will likely have student loans of some kind in their names, sometimes totaling tens of thousands of dollars or more, and keeping tabs on these every once in a while will certainly help college kids to understand what they're going to be dealing with once they graduate. Further, many young adults also have some other accounts in their names, such as credit cards or auto loans, and these, too, will be listed for perusal on such a document.
What comes next?
Understanding the amount of money that they owe on all of their accounts may help college students make better decisions in the future, and that in turn can lead to a better credit standing that will serve them well as they move into the "real world" after graduation. For instance, they might be able to determine that they have more credit card debt than they thought, and should therefore scale back or entirely discontinue their spending. Or they might see that they recently missed a payment into their auto loan, and therefore could decide to redouble efforts to make sure all bills are paid on time and in full to avoid running into any more serious credit trouble than they've already faced.
Finally, when checking over a credit report, people of all ages should strive to be extremely vigilant about spotting any potentially unfair markings. These entries could have considerable negative effects on a person's credit standings, and therefore may need to be remediated as quickly as possible to return borrowers to where they deserve to be. One potentially helpful way to do this is to work with a credit repair law firm, which may be able to sort out any issues that have arisen more expediently than the average person would likely be able to accomplish on their own, as these entities tend to have a wealth of experience in dealing with this kind of problem on borrowers' behalf.