Good Credit is king when it comes to getting financing for life’s purchases and even getting a job. While it isn’t easy in today’s slower economy, it is crucial for a person to build solid credit as early as possible. Having good credit means you can borrow less expensively and even qualify for loans when you want to rent an apartment, purchase a car, get a credit card or buy a house. As far as improving your credit rating, or helping your child improve their credit rating, it’s never too early to start. Without positive credit, you could wind up overwhelmed by serious debt problems and even face bankruptcy in the future.
Unfortunately, far too many people these days are focusing only on their immediate economic needs and are not doing enough to prepare for an uncertain future. A recent study by Bankrate.com found that approximately 66 million Americans do not have any money saved up to get them through an emergency situation. This is a particular problem for recent college graduates, who often don’t consider their long-term economic needs and instead only worry about paying next month’s rent, covering their upcoming car payment, or dealing with some other short-term expense.
Another issue faced by many recent college grads is that they are often saddled with crippling student loans. As the interest on these debts accumulates, the student loan repayment process becomes a vicious cycle, with income being dedicated to paying off loans and practically nothing else. As a result, the debtor may find that it is virtually impossible to stash any money for their future.
Of course, an even bigger problem occurs when the debtor feels as though they have no choice but to ignore their student loans and instead pay monthly expenses. This can destroy the person’s credit and establish the kind of bad Credit History that will make it extremely difficult to buy a home in the future.
Parents may actually be in the best position to assist their children and help to prepare them for building solid credit. For instance, getting your child a credit card, or even enrolling them in a secured credit card account program through your bank, could go a long way toward establishing a positive credit history. The best approach is to use a credit card for affordable expenses and pay it off each month. If that can’t happen, then keeping the debt low enough to pay off in a few months and making sure you make monthly payments on time is important.
If that doesn’t happen, credit cards become a credit risk and the cardholder may build a bad credit history that will hinder them in the future.
To learn more, view the Washington Post article, “First Steps New Graduates Need to Know to Build Credit to Someday Buy a Home.”
If you are struggling to pay off your student loans and need help dealing with debt problems, you should talk to a qualified debt relief and bankruptcy lawyer immediately. The McDowell Posternock Apell & Detrick, PC team assists clients in Cherry Hill, Moorestown, Maple Shade, Browns Mills and the rest of South Jersey, as well as the Philadelphia region. We can help you figure out how to best handle your student loan debt and avoid bankruptcy. Contact us today to schedule a free consultation.
The post Why It’s Important for Millennials to Establish a Positive Credit History and Actively Manage Their Debts appeared first on McDowell Posternock Apell & Detrick, PC.