Having good credit is essential to receiving a loan or buying a house. Read and learn how to establish good credit in college.
"Make a budget, stick to it and have a plan," said David Reaves, Auburn Bank's vice president of mortgage lending. "Get on a written budget, I can't say enough about having a budget because basically it is plus and minuses. If you have more (money) going out than you have coming in, you have a problem."
Reaves said it is important to only use a credit card for emergencies. If a credit card is being used to buy groceries and every day expenses, there is a problem.
"Ask yourself if you really want to be paying for a night out in Auburn five years after college," Reaves said.
Step 1: Take care of existing accounts. Having active bank accounts in good standing can prove the owner is not a credit risk. Reaves advises students already feeling in debt to get a part-time job and start paying off the credit card now.
Step 2: According to financialplan.com, a history of holding a steady job improves the likelihood of getting approved, as opposed to someone who is often unemployed.
Step 3: Lenders will also see how often a person moves and whether the property is rented or owned. Since this can be difficult as a college student, just make sure to pay rent on time, financialplan.com suggests.
Step 4: Even if students do rent, getting utilities under their names and paying the bills on time won't establish a credit score, but can help out first time borrowers.
Step 5: "Limit your credit amount to around $600, to maximize your credit score and keeping it at below 30 percent of whatever your available credit is," Reaves said.
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