One Hundred Dollars a Month

Now that The Girl is in college, I have started to realize that there are a lot of little details to beginning adulthood that I just never thought about as a mom.  Right now, she is in the dorms, but eventually, I imagine she’ll want to move off campus and rent a place.  Renting usually requires a credit score.  Moving off campus means she may need to buy a car.  Unless she has the cash, she’ll need a credit score.  These next couple of years really are a chance for her to set herself up for adulthood in a responsible way.  Building her credit in a way that doesn’t land her in credit counseling later seems like a pretty good thing, so I’ve kind of started guiding her through the process.

If you are in college {or you have a college student} now is the time to create a solid foundation.  Here’s a couple of tips to get you started:

1. Start with a basic no-fee credit card.  PAY IT OFF EVERY MONTH.  Don’t get into the habit of carrying a balance.  Paying interest on a lifestyle you can’t afford is stupid.  Paying if off in full every month will boost your credit score big time.
2. Pay all of your bills on time.  If you have a car payment already, or even just insurance on a car, make sure to pay it on time.  Cell phone bills count too, so keep up to date on them.
3. Don’t ever co-sign for friends.  If you have credit and friends want to take some out, resist the urge to help them out.  That’s why they have parents.  You could seriously get burned this way.  Better just to avoid it and keep the friendship intact.
4. Don’t apply for several lines of credit at the same time.  Every time you apply for credit, it will affect your credit score.  Applying for too much in a short window will really affect it.
5. Be smart with student loans.  Don’t take out more than you need and have a plan to pay them back.
6. If you don’t want a conventional credit card, try starting with a gas card.  You’ll save money at the pump, and as long as you PAY IT OFF EVERY MONTH, you’ll build credit.
7. Check your credit score yearly.  It may not seem like a priority now, but identity theft is a pain in the butt.  Better to catch it, or any other errors, early.
8. Keep your mailing address up to date.  As college students move home for the summer and then into new apartments each fall, one of the things they often forget to do is change their mailing address with creditors.  Creditors don’t care if you didn’t get the bill due to a mailing address error, you credit will be affected irregardless.  So, keep a list of all of the places you need to contact every time you change addresses.

Becoming financially responsible and independent is like that final push into adulthood.  Doing is right only makes your life easier in the long run {and short run for that matter}.

~Mavis