The way you handle money early on in your life can set a spending pattern for many years to come. For example, if you begin relying on credit right after college, you may find yourself continuing to accumulate credit card debt for the rest of your life. For this reason, it’s important to actively build your financial future by creating a budget, improving your credit score, and paying back owed debt.
Know your credit score
The first time you borrow money from a lender that reports to a major credit bureau, you will generate a credit report. Most home loans, student loans, and credit card debt is reported to a major credit bureau, so you may already have a credit report in your name. Any time you wish to take out a future loan, your lender will look at your credit score to determine whether you qualify for the loan and what your interest rate should be. For this reason, it’s incredibly important to check your credit score for any errors.
Use debt sparingly
The biggest rule in borrowing is to never borrow more money than you can repay. If you’ve never owned a credit card, then you should begin by just taking out one card in your name. As you use your credit card, be sure to only charge what you know you can pay back. You may also want to consider building up your credit history by using a secured card, which you pay for in advance.
Repay your debt
Six months after you stop attending school, you need to start repaying your federal student loans. This includes your Stafford and Perkins loans. In order to ensure that you don’t miss any loan payments or benefit options, make sure that your lender knows your new address.
If you are considering filing for bankruptcy, Cutler & Associates, Ltd. can help you understand your options. Our bankruptcy law firm has focused on Chapter 7 and Chapter 13 cases since 1990. You can reach our Aurora or Schaumburg office by calling (847) 849-1834.
I worked with Stuart from Cutler and Associates to help me file for Chapter 7. On my first visit , Stuart made my feel at ease by his calm demeanor, thorough explanation of the entire process, and his honesty. Stuart kept me up to date on all aspects of my case and was quick to reply to my many, many e-mails, texts, and phone calls. . .. His...
For many college seniors, graduation means setting up life by searching for a job, finding a new place to live, and establishing good spending habits. One of the best ways for recent college graduates to build a favorable financial future is by establishing the best credit history possible. This means avoiding some of the most common credit mistakes made by recent college graduates.
Maxing out a credit card
Using credit cards is one of the easiest ways to build a favorable credit history, but only if you can immediately pay off your monthly balance. Even though you suddenly have access to thousands of dollars, you need to avoid the temptation to spend the limit. If you do spend more than you can reasonably pay off, you will begin to accumulate interest rates and possibly be trapped in cycles of debt early on in your life.
Skipping a credit card altogether
While some people are guilty of overusing credit cards, other people choose to skip credit card use altogether. In reality, credit cards are very useful for purchasing airline tickets, making car rentals, and buying items online. Establishing good credit card spending habits also shows responsibility, allowing you to build a positive credit history and a higher credit score.
Failing to check credit reports
The only way to determine if there is an error on your credit report is by checking it. As soon as you graduate, you should take the time to download your credit report, review the information for accuracy, and report any errors to the credit-reporting agency. Not only will this help you clear up any problems, but it will also help you determine just how much you need to improve your credit score over the next few years.
Call (847) 849-1834 to schedule a free bankruptcy evaluation with Cutler & Associates, Ltd. We have more than 25 years of experience handling consumer bankruptcy cases in the Chicagoland area. You can schedule an appointment at one of our seven convenient locations, including Aurora and Schaumburg.
Even though bankruptcy may be associated with poor spending habits, credit card debt is not the leading cause of consumer bankruptcy cases in the United States. Researchers from Harvard Medical School and Harvard Law School have found that medical bills are responsible for 60% of U.S. bankruptcy cases. More upsetting, 75% of petitioners have health insurance coverage.
This video goes into further detail on the medical bill bankruptcy findings from Harvard Law and Medical Schools. As this report explains, research shows that the average middle-class American family is just one serious illness away from filing a bankruptcy petition. Even Americans with health insurance coverage find it difficult to pay for mounting medical bills or expensive medical treatments.
Cutler & Associates, Ltd. has seven convenient locations to better serve our clients. To make an appointment in our Schaumburg office, call (847) 849-1834 today.