Amid the excitement of graduating from college, maintain two priorities: keep your student loan account in good standing and don’t miss any credit card payments. If you have neither loan nor credit card, then great! Unfortunately, current stats indicate that 44 million American borrowers owe $1.48 trillion in student loan debt. I assume you have both a student loan and a credit card.
Take these steps right after graduation:
- Request your free credit report and review it carefully for phony accounts or errors.
- Get a job! Work full-time and save every penny you can for at least three months. Set aside $500 for the emergency that will hit you at the worst time (think car repair). An emergency fund is important because you don’t want to be forced to use your credit card.
If you have a credit card, never spend more than 30 percent of your credit card limit. Let me illustrate: if you owe $300 on your credit card and have a $1,000 credit limit, your ratio is 30 percent. You can’t see it, but the bank who issued your card is now nervous that you may not pay off your credit card at the end of the month. Your credit score is affected when your ratio approaches 30 percent.
Avoid opening new credit card accounts as these new credit lines will impact your credit score by 10 percent. Use time to your advantage as 35 percent of your credit score is based on your payment history (a long credit history contributes to a higher score).