| A part of modern living involves getting and using | | | | problem is that it can skew the ratio of debt to |
| credit. Many people would proclaim that it is better to | | | | income for these people. Most working college |
| live on the cash basis and to never owe anyone | | | | students do not make a great deal of money, and |
| anything, and that would be good advice, but it is | | | | that low number when used as the basis for the |
| nearly impossible to live that way today. For the | | | | debt to income ratio can result in a negative on the |
| most part, American adults will have to get credit at | | | | credit report. Also, if payments on credit cards are |
| some time or another and one of the best places to | | | | missed, and they are missed a great deal of the |
| do that is through your local bank. | | | | time, the student can end up with several late |
| Young adults who are just starting out often find it | | | | payment notes on his or her credit report. |
| difficult to get credit and when they do get it they | | | | The same can be said about a bank loan. A missed |
| often have a difficult time repaying it. Credit mistakes | | | | payment is a missed payment, but young adults tend |
| early in life can follow a person for a long time, often | | | | to be more careful when paying back a loan to a |
| as much as seven to ten years, depending on the | | | | bank. If parents discuss the importance of prompt |
| type of problem encountered. It does not have to | | | | repayments, the young adult will most often be more |
| be that way. | | | | diligent in making the payments and this will go a long |
| A good place to begin with credit is with your local | | | | way in helping the person with future credit. |
| bank. Often the local bank is willing to lend small | | | | Another method for helping establish credit through |
| amounts of money to their younger customers. | | | | your local bank is to apply for a secured credit card if |
| Banks understand that loaning smaller amounts to | | | | they offer them. These credit cards require a deposit |
| begin with they can help young, working adults to | | | | be made into an account and the credit limit on the |
| better understand the basics of credit and | | | | card will not exceed the amount that is in the |
| repayments. These small cash loans, usually in the | | | | account. This can be a good way to teach young |
| $500-$1000 range, are a great way to establish a | | | | adults about using credit cards and it can also be a |
| good credit foundation that can serve young adults | | | | good way to get some positive marks on their credit |
| as they grow and require larger amounts of credit. | | | | reports. |
| Getting a loan from the local bank and repaying it on | | | | Once some credit has been established and |
| time will also allow young adults to begin their credit | | | | payments have been made, young adults should be |
| reports on a positive note. Many young adults, | | | | directed to inspect their credit reports. It is amazing |
| especially those who are in college, often begin their | | | | how little is taught in school about credit reports and |
| credit life by taking on a credit card and charging it to | | | | credit scores, given the importance they play in |
| the max. This can cause a few problems. The first | | | | everyday life. |