Tuesday, January 19, 2016

Finances Matter: Practical Financial Tips for Adult Learners

Building Good Credit: Do’s and Don’ts

When helping adult learners return to school, one of the biggest concerns our financial aid specialists hear is worry over how the cost of education will impact students’ overall finances.  Unlike traditional students, adult learners are often financing their own education, and in addition to planning for themselves, may also be financially planning for funding their children’s college education, taking care of an elderly parent, or starting to think about saving for retirement.
One way adult students can take some of the financial anxiety out of going back to school is to practice good financial habits across the board.  Over the next few months, we’ll be sharing practical tips that adult learners can apply to their finances in order to be financially healthy and minimize their anxiety.
First up, let’s take the mystique out of how to build good credit:

  • Start slowly.  When starting to build good credit, it’s important to start out slow, and to not apply for too many credit cards at once.  Each time you apply for a credit card, the credit card company places an inquiry on your credit report.  While one or two inquiries won’t impact your credit score, many inquires (especially over a short period) will bring down your credit score by several points.
  • Use only the credit that you can afford to pay back. If you won’t be able to pay back a purchase, don’t make it. Spending money you don’t have is a bad habit to get into, and will have a negative impact on your credit score.
  • If a balance is carried, keep it small. You should always pay your balances in full and on time.  However, if you must carry a balance, lenders look at the percentage of credit balances against the credit limits allowed. The higher the percentage the greater the risk.  To avoid a poor credit score, keep any balances that you do carry as small as possible.
  • Use credit.  Credit cards that are opened and go unused stagnant negatively over time.  Make sure to use the credit cards you have, but remember to always pay the balance in full and on time.
  • Don’t close accounts that carry a balance. If you consistently can’t afford to pay your balances on time, you will incur a higher balance that you must pay.  Don’t close the account, instead take action and contact the credit card company for a payment plan.

For our entire Finances Matter: Practical Financial Tips for Adult Learners presentation, click here

To learn more about how you can finance your education, and get the career you deserve, click here.