When I was in college I was part of a new major program that I lovingly call, “create a major.” It was much like a masters program where I got to name my degree and mix all sorts of classes together, but I had to create a thesis project to graduate.
I created what was then one of the first student film festivals called, Hometown Cinema.
It was actually so amazing to be in school and building a company at the same time. Almost everything I learned from business I learned building Hometown Cinema, even all the hard stuff.
I could ace my classes and my business was booming, but I really didn’t know much about credit and budgeting. At that time, I will probably date myself here; credit card companies had just learned that the college market was ripe for the pickin’.
Yah, I got a card or two, and yah I probably wasn’t terribly responsible with them. I know I made some crazy credit mistakes that I wish I could change.
Crazy Credit Mistake #1 That You Need To Know
If you are still living in your first apartment then this tip is for you. While you might think that you just up and move when you leave school, that isn’t quite the case.
You have to spot clean your apartment to get your deposit back – yes, you will want that money back, trust me. You also need to make sure you do one simple thing – fill out forwarding address papers with the Post Office and call each creditor to change your address with them.
“Missing the last payment of your utilities when you move is a huge mistake. Too many college kids end up with collections on their credit reports simply because they forgot to leave a change of address when they move from one apartment to another. Not receiving an invoice does not absolve you of your obligation to make your payments,” says John Ulzheimer, credit expert for Creditsesame.com.
Got it – change your address – pay your bills!
Crazy Credit Mistake #2 That You Need To Know
When I was in college there were no classes on Financial Literacy like the one I teach at CSUN. You either took Business or Accounting ,and that was it. It’s a criminal act if you ask me that we don’t teach kids about finances really early on. Don’t get me started.
What you need to know is this. “Your credit history starts now, so don’t make mistakes that will take a long time to fix,” proclaims Bethy Hardeman, Credit Karma’s Consumer Advocate.
It’s so true. Little did I know when I was racking up those credit cards that I actually could cause harm to my credit score for a very long time. “You don’t have to say no to credit, but you should understand how to build and manage it,” says Hardeman. Spot on!
You can overcome a money mishap. We all make many of them. Don’t mess with your credit though; I can’t even begin to explain how important it will be to you in the future.
Crazy Credit Mistake #3 That You Need To Know
It’s pretty hard to put the car in reverse on this mistake. Student loans are like the boogie monster with three heads.
When you are in school and stacking debt on debt it really has no impact on your life. When the first student loan bill comes 6 months after graduation, suddenly you realize the impact of those large numbers.
According to a 2013 CNN Money article, the class of 2013 grads have an average of $35,200 in total debt when they graduate.
Let me just ruin your day now. You cannot run away from your student loan debt. In fact, one thing I learned about student loans is that they are entirely yours. If you get married, and divorced, the loans follow you.
Credit Sesame has some great advice on this mistake. “With student loan debt now exceeding credit card debt, it’s important that students and new grads understand exactly how student loan debt is treated in the world of credit reporting. Unpaid government guaranteed student loans are the only items that don’t ever have to be removed from your credit reports,” says Ulzheimer.
What’s the message? You will pay your student loans back, unless you qualify for student loan forgiveness, no matter what!
Crazy Credit Mistake #4 That You Need To Know
Raise your hand if you like free money. I do, I do, I do!
I know you are getting all sorts of credit card offers and you feel like a kid in a candy store. Believe me, I know. Let me ask you this though. What if you actually got a free plane ticket, $25 rebate or a free hotel stay for the money you are already spending?
You’d like that, right?
“Students may not realize that there are vastly different types of credit cards out there, and they may rush into applying for just any card without doing the due diligence,” touts Hardeman.
There are so many cards now that offer rewards depending on what you love to do. Check out Nerd Wallet’s list of the best rewards credit cards for 2014.
If don’t remember anything but this, remember these famous words from Janet Jackson, “What have you done for me lately.”
If your credit card hasn’t done anything for you, then time to wave bye-bye (please don’t cancel your account though, that messes with your credit score).
Want to know more about credit and how it works?
Leave me a comment below with any questions you have and I will gladly respond. Heck, I may even write an article about your question.
(Photo credit Credit Cards https://flic.kr/p/kkUu3B)