College time is the time to get your life on track and under control, which means you don’t want to mess up your credit. Once you are out of college you want to be able to get a good job so you can pay back your college loans, and then you want to buy your first home, and if your credit is whack that’s not going to happen.
The key, as a college student, to staying away from debt is ensuring, aside from your college tuition, you aren’t spending money you don’t have. If you want to get out of college without any debt, here are some things you should probably try to do.
If you’re already in over your head, get help. There is help out there to repair your credit, no matter what the status of your debt is (a lot or a little). Even if you can only make small payments some payments are definitely better than none.
Consider borrowing money from your parents, if you need to. The money they loan you won’t give you bad credit, and you can usually take longer to pay them back. Of course, they may still prefer to charge you some interest (depending on what type of parents you have).
Don’t Abuse Credit Cards
Do not get any credit cards unless you have the steady income coming in to allow you to pay them off on a regular basis. Credit cards are not free cash, and due to the interest rates on them you end up paying more back the more you spend, and the longer you take to pay them off.
Credit cards can be helpful to increase your credit rating, but if you’re not going to be able to keep them paid off on a regular basis they will get you into trouble. It may be a better bet, as a college student that may not have a steady income, to get a debit card from your bank so that you can only spend money you already do have (but more conveniently).
Start Paying Off Your Loans Immediately
It can be in your best interest to start paying your college loans off as soon as possible. Interest being the operative word since those rates can get out of control the more you borrow. At least make interest payments so that your loan amount is growing larger continually.
Your loans could start off something like forty-five thousand and if you don’t interest payments they could quickly (within a few years) be over sixty thousand. Make payments whenever you can, even using your tax refund each year to get a chunk taken care of, above the interest payments you’ve been making.