Graduating from college is an exciting and nerve-wracking time. Taking the first steps into adulthood includes becoming responsible for your finances, especially your credit score and reports.
Your credit score will be apart of you for the rest of your life. Your credit score can determine what kind of apartment you get and even in some cases where you can get hired. If you are a recent graduate, here are 5 essential things you should know about your credit:
Nearly all recent graduates will leave college with some form of student debt. After a grace period of roughly 6 months, you will be required to begin the repayment process of your loans. Be certain that your lender has your correct contact information to be able to communicate as to when your loans are due.
Try to calculate exactly how much you will be spending on a monthly basis to pay off your student loans. If you are unable to find a job that pays you enough to repay your loan, talk to your lender to see if you can work out a creative solution to repay your loans.
Bills and Roommates
If you are a recent graduate stepping into the world of professional work, you may be living in a single apartment with a few roommates. Basic utilities are tied to your credit score. Late payments can take a toll on your repayment history, which makes up 35% of your total credit score.
If your name is on the utility bill, be certain to pay on time and in full. Missing a payment or only providing a partial payment can send your account into collections.
Your Free Score and Report
Thanks to government mandates, all of the 3 large credit bureaus are required to provide you with your credit report and score for free once per year. Be sure to access the website www.annualcreditreport.com to download your free scores and report. Take the time to look over your report for any errors or mistakes that could harm your credit score.
Do Not Co-Sign for Anybody
If you have a healthy credit score, do not risk your credit for anybody. When you become a co-signer on a loan, you can be held responsible for repaying the loan. If your friend or relative you cosigned for misses a payment, your credit score can take a massive hit. Think twice before you let anybody borrow your credit.
Start Building Credit
If you are a recent graduate, chances are that your credit history is young. Length of credit plays a crucial role in increasing your credit score. See if you are ready to apply for a credit card to begin building credit.
However, it is important to remember that having a credit card is a big responsibility and that it can be easy to fall into debt. Be a responsible borrower and only spend what you can repay if you are looking to build a strong credit score.
All in all, being a young graduate is an exciting time. Taking the steps to build good credit and ensure your financial stability will help you tremendously in the long run. Be proactive and dedicate yourself to building up your credit so that you can get an auto loan or a mortgage with ease.
If you are looking for an auto loan but don’t know where to turn, CrediReady can help. Our nationwide network of trusted dealers and verified lenders work with buyers in all credit situations. Take a moment to fill out our free no obligation loan inquiry form to start car shopping today!