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GREady: Get Ready for Graduate School

Do you want to attend graduate school? If the answer is yes, shift the gear in drive. This blog will help you 1) stay informed about graduate programs, 2) decide on graduate schools, 3) apply for graduate schools (including the GRE and personal statements), 4) prepare for interviews, 5) find funding and lots more. Although this site cannot guarantee a masters or doctoral position, it does promise that you will be a very competitive candidate for your desired program!

Monday, June 19, 2006

How to Build Your Credit History


gradPak states that a poor credit score can affect your ability to rent an apartment, buy a house, or buy a car. The ability to pay for an apartment or house is a huge consideration when attending graduate school. Your current credit score will follow you for seven years so it is important not to make any drastic mistakes. To view what potential creditors will see, request your credit reports. You can obtain a free credit report every 12 months from the three nationwide consumer-reporting companies (Experian, Equifax, and TransUnion). Click here to request a copy of your credit score. If you are denied credit by a creditor, that creditor has an obligation to inform you why you are not issued credit. Use this as an opportunity to understand what your problem areas are and how to address them. If you are finding difficulties in applying for credit, here are a few tips:

1) Open a bank account. Although it is not officially credit, it shows a history of money management.

2) Sign up for a credit card at a retailer. Retailers are typically less restrictive with who is approved for credit.

3) Get a cell phone. This will also show a history of payment and future creditors will more likely view as someone who would repay loans.

4) Pay student loans. This might be the only credit history you have so far so it is extremely important to show responsibility with payments.

Tips for Establishing Good Credit:

1) Make Your Payments Consistently and Make Them on Time. This is the most important factor in establishing good credit. Credit reports list any late payments, bankruptcy, or collection activity. If you are unable to make payments, call you creditors and see what can be worked out.

2) Keep Your Debt Low. Credit scoring models look at your ration of debt to income. gradPak suggests using the 20% rule- pay outstanding debts and avoid getting into total debt that exceeds 20% of your annual income.

3) Establish History. Creditors look for patterns; therefore, you need a lengthy payment history. Short credit history can be offset if you make timely payments and paying more than your monthly minimum. Most importantly, do not continually switch credit card companies.

4) Stick to a Few Accounts. Look at having only 2-3 credit cards, more than this might have a negative impact.

To learn more about establishing a credit history and applying for credit, view the gradPak money section.

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