Managing Your Credit
If you are a college student you are most likely being bombarded with credit card offers and applications abound!  Having immediate purchasing power at your finger tips can be an exhilarating experience.  But having credit can be a VERY sharp double edge sword and if you are not careful it will cut you!  So heed some advice!

1. Keep records of all your credit lines and pay bills on time. Online checking accounts and finance software can help you manage your budget. Keep accurate records and pay on time to prevent expensive overdraft fees which in turn will disrupt your budget. Avoid using your credit card for unplanned or impulse buying.
2. Have one credit card for emergencies.  It is a good way to eliminate unnecessary spending. Furthermore, start paying your credit card purchases in full at the end of each month. Remember that by not paying your credit card in full each month you will be gaining interest on the purchases you made therefore paying more throughout time. By paying the minimum amount due on a credit card and purchasing more you will get yourself into a debt that will be hard to pay back.
3. Keep track of your credit report. You may visit www.AnnualCreditReport.com once a year to obtain your annual credit report. This is your best defense against identity theft. You may also go online to all three major credit bureaus to find out your credit score.

Credit Bureaus: 

• Equifax: 800.685.1111
  www.equifax.com
• Experian: 888.397.3742
  www.experian.com
• TransUnion: 800.916.8800
  www.transunion.com

Credit Reports / (FICO) Scores
A credit score is a number that indicates how likely you are to pay on a loan or credit card as agreed. It is one piece of information lenders use when evaluating your application for credit. Your credit score is a combined picture of the credit line details contained in your bureau data. The way you have demonstrated using credit in the past will likely predict your credit practices in the future.

The most important factor in determining your credit score is the frequency that you pay your bills on time. Your credit score will improve as you continue to handle your credit obligations responsibly.

Want to increase your score - pay on time!

Scoring models also weigh and balance varying factors within your file, including number and usage of credit lines, how long of a credit history you have, whether you have been “shopping” for credit and notification of collection and public records such as liens and bankruptcies.

Your request for a copy of your credit bureau report will not affect your credit score in any way.  Should you locate errors on your report, be sure to contact the bureau to investigate the item and respond to you within 30 days. Credit bureaus are required by law to follow up on disputes in a timely manner.

Good Credit for your Future
Maintaining good credit is extremely valuable when you are ready to purchase a house, car, take out a business loan, etc. That is why it is important to maintain your credit history free of any flaws. We already mentioned you should keep track of it at least once a year as it will help you with your future purchases.

Credit Card Facts
Yes, we do live in a credit based society which means, for convenience, you will likely need to have one credit card. But, frequent use of a credit card can lead right into financial disaster. Over-spending because of a high credit limit is the easiest and fastest way to say goodbye to that excellent credit rating you were going to use to buy your home.

Credit Card Tips

• Credit cards are best used for emergencies and the occasional convenience. Pay off the entire amount you owe when you get the bill. Try to get in the habit of always using cash to pay your way. Ask yourself, is this a “want” or a “need.” Never use a credit card on impulse. Be sure you leave the cards at home when you're “window shopping.”
• A credit card debt is nothing more than a high interest loan. Over limit fees and late fees are always on the rise. You may also have to pay an annual fee just for having the card, and if you get cash advances, there is always a large fee associated. And, we haven't even mentioned the interest rate yet! Those “low, introductory offers” are appealing, but remember the average interest rate on America’s credit cards is around 20 percent interest.
• Credit cards cost: A $500 unpaid credit card bill over a year, at 20% interest = $100 in finance charges alone. Most companies now only require a 2% payment. So, it’s easy to see how you can so easily “exceed your limit” and then make “late payments” - all at about $25/a pop. Your $500 of charging can easily reach $700.
  
• Early Warning Signs of Trouble:
  • Your cards are maxed out to the credit limit.
  • The amount you owe is not going down each month.
  • You are having trouble making the minimum monthly payment. 
  • You need to rely on your card for living expenses. 
  • Cash advances have become a necessity.

Getting Help
If meeting your monthly financial obligations is a continuing burden for you, then certainly, the stress will begin to affect your performance in school. Be sure to ask for help. Start with your family first, and then ask your college for counseling services.

The National Foundation for Credit Counseling (NFCC) provides free credit counseling in your community. Visit www.nfcc.org for a referral. They also have valuable web resources to counsel you on budgeting and living expenses.

Then, the steps to financial freedom continue. Be sure to cut expenses. Start with the discretionary items in your budget such as eating out and entertainment. If you still find you can’t make your budget each month, work out a new payment plan with your creditors. When you contact your creditors, be candid. Tell them why you can’t afford your monthly payments. They can assist you in building new terms. But, they will enforce them strongly to ensure you complete your obligation.

This is in your best interest so that you can repair your credit rating.