What is a credit report and Why is it important to me?
A Consumer Credit Report is a report of personal information maintained by a credit bureau about your and your finances. The report will have information such as your name, address, social security number, and credit history. Credit grantors, such as banks or lending institutions, may report positive or negative credit payment information to any or all the credit bureaus. Utilities, such as the telephone and power companies, can also report your payment history. Credit grantors can and will review this information any time you apply for any kind of loan, including a student credit card, to use in determining whether they will lend you money or not.
Why is building a good credit history so important?
Establishing a positive credit history makes it that much more possible for you to obtain loans for items such as cars or homes in the future. Your credit record may also influence the interest rate you will pay and the amount of money a lender is willing to give you. It will also be reviewed when you rent an apartment or even a home. Therefore, it is important to pay your bills on time and keep the amount of debt you incur at a minimal level.
How do I choose a student credit card?
Choosing a student credit card is a big decision. It is very important to know the terms and conditions associated with the student credit card. You should understand a student credit card’s features such as the annual fees, Annual Percentage Rates (APR), and repayment requirements before making an informed decision about the student credit card best suited for your financial needs. If you have any questions that are not explained in the paperwork, call the credit card company. Do not assume anything, ask the questions.
How can I establish good credit now to prepare for the future?
To establish a good credit history, you should start with paying your bills on time. Second, it is important to not have too much outstanding credit debt and to only borrow what you know you can afford to pay back. If your credit history has not yet been established or you have very little credit history established, you should definitely consider building one now.
Credit card companies in recent years have changed their marketing strategy in electing to go after young consumers instead of targeting people with well-established credit history. This can be very exciting for students, but it can also be a scary proposition for the student. If used responsibly, a student credit card can be used as a building block for good credit. If you get the wrong student credit card or you use it without proper discretion, then your student credit card could be the beginning of the end for your good credit rating.
As a college student, there should be absolutely no reason to go nuts when picking out your first student credit card. Sure, a $2,000 credit limit might sound nice, but really why on earth would you need that much? Having that much credit is a call for disaster if you are not used to having a student credit card. Instead of going for the highest offer out there, choose a smaller line of credit and work your way up to something more substantial. Once you get the hang of making payments every month and how student credit cards work, then you can start using it more.
Student credit cards.com @ June 17, 2008