DIPLOMAS, DREAMS, AND DEBT

By Elaine Smith, Branch Manager
Better Business Bureau
July 14, 2005

August is return to school time for many college students in Middle Tennessee.

Unfortunately, along with earnings diplomas, many graduates are also acquiring a staggering amount of debt.

According to Nellie Mae, a leading provider of student loans, the average graduate will have accumlated more than $20,000 in student loans and credit card debt. BBB surveys reveal that most students will triple the number of credit cards they own by graduation.

Few students realize that how a person manages student loans, credit cards and other debts will effect their lives in so many different ways. Many students are unaware that an individual's bill paying history will result in a personal credit score based on their credit history. Even after graduation, they don't think they need to worry abut their credit score until they need a mortgage to buy a house, and it can come as a shock when they find out that employers routinely access credit scores as part of the application process.

Students and young adults, listen up. Having a good credit history, which leads to a good credit score is always considered to be the mark of a mature and responsible person of character. A college degree does not mean failure to live up to our commitments won't count. Start today. Build a positive credit history that speaks to your character and to your power in the marketplace:

*SET A BUDGET AND STICK TO IT:
When you get your first job, sit down and determine exactly how much money you are earning verus how much you owe. To often, people make financial decisions based on how much they think they will earn, rather than what they are currently making. Don't underestimate the cost of day-to-day living.

*PAY BILLS ON TIME:
Promptly paying all bills, payments due on loans and credit cards will help to build a strong credit history, missed payments can have a devastating effect. Late payments are as bad as missed payments and can be more expensive since they always result in extra fees or penalties.

*USE CREDIT RESPONSIBLY:
Credit is a loan, one that will need to be repaid with interest. Monitor monthly bills and make spending adjustments. Avoid spending up to the limit on credit cards.

*KEEP IN TOUCH WITH CREDITORS:
You can run, but you can't hide. Far too often people get into financial trouble because they change apartments, or return to college and forget to tell their creditors. Anyone who is expecting a bill and does not receive it in the mail should contact the creditor imediately. If you are in a fiancial bind contact your creditors and arrange a re-payment plan that is mutually agreeable.

*CREDIT EDUCATION IS A MUST:
No one is born knowing how to manage money or credit. If you want an "A" in money management financial literacy is a must. If you didn't get money management 101 and a course in credit responsibility at home or school, its not too late to learn, contactig the CBM Credit Education Foundation www.cbmfoundation.org

Commit to the Rule of the Ages:

SPEND LESS THAN YOU EARN.

When in doubt check it out with the Better Business Bureau at 931-520-0008 or www.gobbb.org.


Elaine Smith, Branch Manager
Better Business Bureau
18 N Jefferson Ave.
Cookeville Tn 38501