Sheila Harris is from Brooklyn New York. She has been accepted to St. John’s University for a Doctorate programme and will be joining in Fall 2017. She is the winner of our Essay Competition and has bagged a prize of $365. Her article is on the topic:
Is it crucial to establish and maintain a sound financial credit during college years?
When I was an undergrad in college some years ago, I remember walking down the halls, and on the bulletin boards were applications for credit cards. Being young, I thought, “Wow! This is great. I can get things now and pay for them later.” College was my first taste of being an adult, and now I was being exposed to buying power, I was drawn to the idea that I could apply and get credit.
I picked up a few of the applications, (Actually more than a few) and saw that they did not ask for job or credit history, the only setback was that your limit ranged between $250 to about $1200. I thought to myself, “Now you are talking”; shopping here I come. I managed to get every credit card except Discover; yes, I even had American Express. I found out that although American Express needs to have the full balance paid on time monthly, you can travel with it and only have to be a minimum monthly for travel expenses.
I felt wealthy, coming from a home where I didn’t have food to eat all the time, credit opened up a whole new life for me in college. I couldn’t foresee an issue at the time, nor did I think about any consequences. I did my travelling and shopping, in need of nothing, but I started to learn my lesson fast; when my spending exceeded my pay checks, things became serious really fast. Before I completed my first degree, I was already declaring bankruptcy. Life slapped me in the face hard.
For years after, I was afraid to even look at a credit card. I remembered when my Grandmother died, and I didn’t have money to go to her funeral, my first thought was, “I got to get at least one credit card for emergencies such as this.”
Now I’m accepted into a doctorate program, and at the same time my son is accepted into 10 colleges and is starting his freshman year Fall 17; I’m left wondering, “Is my credit good enough to do a Parent Plus Loan for him? Thinking that he worked so hard to get into college, that he deserves to attend the college of his choice. Then again, will I be able to get a loan to do my Ph.D. in Literacy work? All of these worries stem from my not understanding how crucial it is to establish and maintain a sound financial credit during your college years.
With that being said I am an advocate for maintaining good credit now. I taught my kids the importance of it as well. In writing this essay I came across some good helpful information on why you need good credit, and why you should begin the process of building good credit while you are still a student. (e-campustours.com, 2012)
Listed below is a few reasons why in 2017 it’s more important than ever:
• Companies may use credit reports to help determine employment. (e-campustours.com, 2012)
• Landlords use credit scores to verify eligibility for renting an apartment. (e-campustours.com, 2012)
• Bank lenders use credit scores/reports to determine eligibility for a home loan, car loan, etc. (ecampustours.com, 2012)
If you have a low credit score, it may show your lack of responsibility in handling your bills, and then you run the risk of not getting the job you want if you can’t handle your personal finances, how are you going to handle company’s business. You will be asked to pay more in rent or security deposit for the apartment you want; I witnessed landlords asking for two or three months’ security instead of one month. When I bought my car, I had to go to the special finance department, because my credit had me paying higher interest rates when taking out loans. (Lendingtree, 2009)
Credit is a good thing, although not something to be taken lightly. Credit is one of the main building blocks of a healthy financial future. (Lendingtree, 2009) According to College Parents of America, which I recently signed up for, they did a study about college students and credit cards. They found that almost 84 percent of all undergraduate students had at least one credit card. (Lendingtree, 2009) And about 50% the cardholders had four or more credit cards. (Lendingtree, 2009) They said that most college student’s credit card balance was $3,173 (Lendingtree, 2009); I believe it to be more. (Lendingtree, 2009) The thing I found interesting, and something I did myself, was them saying that about 40 percent of college students reported charging items knowing that they could not afford to pay for them, and because you get lost in the spending. Approximately 60 percent of college students stated they were surprised about the amount of their credit card debt. (Lendingtree, 2009)
With the rising cost of college tuition, for a private school, it’s foreseeable that your student loan debt will be about $80,000 as an undergrad; add to that the scare of having bad credit, students may start to think that they were better off financially before they started college than when they finish college. Although it seems hard at first, in the long run, all of us who owes money will be better off in the end, when we can pay off our debt. Those that never finish college, and still have the lingering debt, well that’s another story all together.
I’m taking it one step at a time; I’m lowering my minimum payments every month, getting rid of the small bills first, because when I look at my income, and realize that every month about $1,800 is going towards credit card bills, including cable (a must have) and our cell phone bill (another must have), I realize that if I bring my bills down to $500 a month, I could save $14, 400 a year…(this needs a moment of silence for the realization to set in)
I have no shame in where I am because I know there is a light at the end of the tunnel, and I will continue to tell my story to young people, so they won’t end up where I am.
Works Cited e-campustours.com. (2012, 10 30). Retrieved from Buiding a good credit score in college:
Lendingtree. (2009). Simpletuition. Retrieved from Building good credit for college students and recent graduates: http://www.simpletuition.com/college-finances/building-good-credit-for-college-studentsand-recent-graduates/