Concord, NH - After years of working hard in college, students expect to land their dream
job, buy their first car and get their own place to live. A number of students are finding
today that mismanaging finances in college can stand in the way of all of these
expectations. The NHHEAF Network Organizations has partnered with Consumer Credit
Counseling Service (CCCS) to develop the Campaign for Financial Literacy in an effort
to promote the importance of educating students about managing personal finances.
Personal financial literacy is one of the most important lessons a student can learn before
they enter college. Grasping the long-term effects of mismanaging credit can change a
student's life and help them to avoid negative repercussions. Many students, upon
entering college, do not have a grasp of managing credit, managing finances, the
importance of budgeting themselves or the negative effects mismanaged credit can
have later in life. Yet, they take on large amounts of loan and credit card debt for the
first time.
One eye-opening statistic discovered in a study completed by the NHHEAF Network
Organizations of 31,000 of their NH student loan borrowers, forty-six percent of college
students had been reported delinquent on their credit card payments. Students must
realize that having bad credit or a low credit score on their credit report can affect
renting an apartment, buying a house or car and landing a job after college.
A credit report is a complete synopsis of a person's history of opening and using credit
cards, borrowing money and making major purchases. Credit reports keep a detailed
record of personal information, legal information, payment history and account history.
A credit score is a number that the three major credit bureaus, Equifax, TransUnion and
Experian, assign to a person to determine how much of a risk a person is when borrowing
money. The most commonly known type of credit score is the FICO score, which is a
calculation of creditworthiness created by the Fair Isaac Corporation. The lower a credit
score, the higher the risk for a person lending money. A credit score can range from 300
to 850. A low credit score can raise interest rates on loans and even prevent you from
being able to make large purchases.
For example, credit checks are done by landlords when a person wants to rent an
apartment and by car dealers when an individual purchases a car. An increasing
amount of employers now do a credit check on all job applicants to get an idea of how
responsible a candidate is with money. They use this as an indicator about whether a
person can be trusted with confidential information and will act responsibly when making
job-related decisions. A negative credit report and low credit score only reflect badly on
the student and stands in the way of opportunity.
Upon entering college, students have the chance to take control over their finances and
prevent this from ever happening. The following three tips will help college students
towards a healthy financial future:
- Create a budget. Though this may appear as an easy task, the biggest
challenge for students is keeping the budget on track. Maintaining a sound
budget in college is a challenge for most students, but the rewards of sticking to it
will pay off in the end. Minimizing debt now can translate into paying less interest
on student loans and credit cards later in life and will leave room for major
purchases such as cars or a home as college comes to an end.
- Track your credit score and review your credit report on an annual basis. There
are a number of online resources such as www.annualcreditreport.com that
allow anyone to pull an annual credit report for free. Students can view their
credit history to make sure that everything reported is correct. It is all too
common for people to be unaware that information on their credit report is
incorrect. This can severely damage a person's credit score. Being aware is the
first step to correcting the problem.
- Stay informed to prevent identity theft. Keeping your information secure is vital in
today's world of hackers. Pulling your credit report is one excellent way to track if
anyone has used your name or information to acquire credit. If an identity is
stolen it can take years, hundreds of dollars and endless days of stress to repair
damage done to your credit. Visit the Federal Trade Commission online at
www.ftc.gove/idtheft.
Throughout the years of college, students experience many levels of stress, one of the
greatest levels is as graduation approaches and students realize that soon enough they
will be taking that big step into the real word of job interviews, rent, personal expenses
and worst of all, bills. No student wants to find out that their opportunities are limited
because they were not responsible with their money. For more information on the
partnership with CCCS and the Campaign for Financial Literacy, contact the NHHEAF
Network Organizations at 800.525.2577 or visit www.nhheaf.org.
# # #
The NHHEAF Network Organizations are comprised of four 501(c) (3) nonprofit organizations that
provide students and families with the resources and funding to pursue higher education
aspirations. Funds generated by the Organizations make their charitable mission possible as
student loan earnings are reinvested in programs and services that benefit citizens of New
Hampshire. For more information, visit www.nhheaf.org.
Posted 05/15/08 to www.NASFAA.org. Posting of press releases is done as a service to Members and does not imply endorsement or support by NASFAA. NASFAA does not review this information for content or accuracy.
