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