In College, Make Sure You Get the Credit You Deserve!

For many young adults college is a time for studying, trying new experiences, and finding out what kind of career they would like to pursue. It is also a good time for them to start their financial and credit profile.

Few college students will think about their credit scores while they are in school, however, graduating with a good credit history can help young adults get their lives started in the right direction.

Federal Reserve Chairman Ben S. Bernanke said financial education and planning boost the economy, and those students who learn financial skills are likely to save more money later in life and remain financially stable.

Some young adults may have trouble building their credit histories during their college years if they are not employed or if their parents won’t co-sign for a credit card. The Credit Card Accountability, Responsibility and Disclosure Act of 2009 requires people who are under 21 have a co-signer or demonstrate that they have adequate income to cover balances. Young adults may need their parents as cosigners but you should make sure that you get a credit card with a low charging limit to avoid incurring credit card debt.

Students should learn how to create a budget that allows them to use their credit card effectively without overextending their finances. Financial education “can play a key role” in promoting financial planning such as budgeting and saving for emergencies and retirement, which help households live better and be better positioned to handle financial shocks, said Bernanke, a former Princeton University professor.

Parents need to teach their children how to use a credit card responsibly to avoid late or missed payments. Online bill payment services with notification alerts can help them to stay on top of their payments. A great new tool geared towards safe online money management is This new personal money management site is worth a look.

Credit is essential for young adults to understand as they transition into adulthood. Almost all employers factor in an applicant’s creditworthiness when considering them for a position, even if the interview was a complete success. Landlords may also hesitate to rent an apartment or home to a tenant that has a limited borrowing history. They can easily pick a different person who has a good credit score and credibility.

When students gain a good understanding of how credit works and what building a credit history is all about, they should also check their credit reports. Many people fail to monitor their credit files and don’t know what type of information is included in their reports. Students who learn and care about their credit early are more likely to keep up with this wise practice in the future.

“Financial education supports not only individual well-being, but also the economic health of our nation,” Bernanke said August 7, 2012 in remarks prepared for a town hall meeting with teachers. “Consumers who can make informed decisions about financial products and services not only serve their own best interests, but, collectively, they also help promote broader economic stability.”