Posts Tagged ‘credit history’

Student Loan Debt Exceeds Credit Card Debt for the First Time in History

Friday, April 29th, 2011


(credit: scui3asteveo)

Q. What’s the difference between defaulting on your student loans and defaulting on your credit card debt?

A. If you fall into a hopeless debt spiral because you can’t pay back your credit card company or your mortgage, you can declare bankruptcy and get a clean credit slate after a few years. If you default on your student loans, you can never escape. Ever.

Unfortunately, it looks like a lot of college grads are about to find themselves with a black mark on their permanent records. Your credit history, unlike that mythical permanent record your teachers threatened you with in 4th grade, can really affect your opportunities in life. It can determine whether or not you get a credit card, a school or car loan, or a mortgage on a new home. Some employers even check credit reports to get the dirt on potential new hires.

Check out this article on good.is for more fun details and a glance at the ever-increasing Student Loan Debt Clock!

See also: this depressing article on “mal-employed” college grads.

Also see also: this list of the “20 most useless college majors,” which shows the limited mid-career earning potential for chemistry majors, among other obvious low-paying career tracks (hello, art history scholars!) Of course, being “useless” financially doesn’t mean your degree of choice won’t make your heart soar like an eagle. We recommend you use your own criteria for success when making major career choices. And don’t default on your student loans.

How can you look at your credit score?

Friday, June 18th, 2010

Checking your credit score is a lot simpler than you may think — in fact, everyone in America is entitled to one free credit report each year from all of the three credit reporting agencies. You can request them online at the fishy-sounding but totally legit and official www.annualcreditreport.com.

You can also buy your credit report, for a nominal fee, directly from each one of these agencies. Make sure you type in the correct website address, because fake websites have similar names and will try to trick you into giving away personal information or signing up for services you don’t want or need.

Why is it good to have a credit history?

Wednesday, October 14th, 2009

When you’re hiring someone for a job, the best choice is probably a person who has a reputation for doing similar jobs well in the past. Although someone without any established reputation is better than someone with a bad reputation, he’s still something of a gamble – you have no special reason to think he won’t perform the job well, but no reason to believe he will, either.

Credit history follows the same principle. It’s basically a record of how you’ve used credit in the past. How much do you owe right now? Have you made your credit payments on time? Have you had any financial problems? In credit as in anything else, a long history of good behavior is a great asset because it inspires trust. For example, a bank may be more inclined to let you take out a loan if you have an excellent credit history; if you’ve repaid your debts in a timely manner in the past, odds are you’ll deal with their loan in the same way.

What’s the difference between a credit score and a credit rating?

Thursday, July 30th, 2009

A credit rating is like a grade for how likely an individual, company, or even a country is to pay back debts on time. Credit rating agencies or bureaus keep track of relevant information about a person, company, or country to determine their credit ratings.

A credit rating for an individual is called a credit score and is a three-digit number, like a batting average in baseball. Credit bureaus (like Equifax or TransUnion) look at how consistently you pay your bills and then publish your credit score, which creditors like banks use to determine how much they are willing to loan you.

Commercial credit rating agencies like Moody’s or Standard & Poor’s assign ratings to companies – from AAA down to D – that reflect how likely it is that the company will pay back dividends on your investment. Some rating agencies also give sovereign credit ratings, i.e. ratings for countries. These ratings give you some idea of how safe it is to invest in that country and take factors like political stability into account.

Your credit score tells creditors (like banks) if you are a good investment or not. Corporate and sovereign credit ratings can help you decide what might or might not be a wise investment.

Credit History is…

Tuesday, June 9th, 2009

Credit history (also known as a credit report) is a detailed record of someone’s previous borrowing and the repayment of that debt. It basically just shows how likely or able you are to pay back a new loan or credit card.