Good Credit Swag (Part 1 of 3)

Part 1 of a 3 part series on getting your credit swag up by Consha Griffin

Good Credit Swag (Part 1 of 3)

It doesn’t matter if it’s Moms, your best friend, your “boo thang” or the bank, everyone wants to be confident that when you borrow money you have the character and means to pay it back.  Although Moms, your best friend, and even the “boo” may let you slide and give you the funds without requesting a credit report, don’t expect the same treatment from the bank.

In just about all cases of applying for a loan, cell phone, apartment, and even sometimes a job you will need to prove your financial worthiness with a credit report.  Many times after you’ve graduated from school, landed a job that pays plenty of “stacks” and even paid back the dough you were loaned by Moms, you will still find it difficult to get approved for credit.

If you’ve gone your whole life up until this point with no credit cards or other debt, you are on the right track!  However, if there is no record of your money handling decisions and with no credit history you will be viewed by creditors as risky business.  Without credit history, how else could creditors know you’re not the next Allen Iverson (Apparently, he didn’t like to “Practice” saving and spending discipline either).

How do I establish a credit history if no one will give me credit do you ask?  Well, we’ve laid out some suggestions here.

Secured credit card

One great way to start building your credit is with a secured credit card.  A secured credit card in most ways is just like the unsecured credit card you are familiar with; however it requires a security deposit generally ranging from $300-$500 and an annual fee of about $40.  This provides assurance to creditors that you will repay your debt, think of it like going bowling and swapping your Jordan’s for the funny looking clown bowling shoes, we’re almost certain that those bowling shoes won’t accidentally leaving the bowling alley.

Although, a secured credit card is backed by your funds, which may resemble a debit card, it is not a debit card at all. With debit cards your usage is not reported to the 3 major credit bureaus (Equifax, Experian, and Transunion). With a secured credit card you are not borrowing against your security deposit, but directly from the creditor and that activity is tracked and reported. Check out Bank of America’s secured card.

Student Loans

Last week we discussed how NOT to abuse student loans in the post Ballin’ on a Budget , and with that in mind note that repaying student loans can help build your credit.  Many federal student loans are based on need and not your credit score, so in most cases you won’t be turned down.  Subsequently, six months after you graduate most creditors will be hitting you with a full court press that rivals that of Basketball “non-wives” receiving child support, and expecting you to cut them a check each month. Consistent and timely payments after graduation can show that you are a responsible borrower, which can boost your credit score.

Co-Sign?

This final option, Co-Signing, is like dating a pretty girl with a bad attitude, seems like a good idea at the time, but can leave you with headache and regret.  Becoming a co-signer on a credit card or loan can be a great option if the person you are co-signing with has great credit and can be relied upon to make payments (if that person exist in your circle, marry them).  However, if you or the other person fails to make payments on time BOTH of your credit scores will be negatively impacted.  Yep, both of you getting messed up credit “at the same damn time.”  #Futurevoice

Your credit can potentially permit and prevent you from obtaining certain luxuries in life.  You can try any of these credit building methods for one year and after that, your credit will likely have improved and you can move on to bigger and better things!   U DEFINE SUCCESS

www.cap1on1.com

Ballin’ On A Budget

Becoming Student loan Savvy and not just student loan broke by Consha Griffin
November 13, 2012 by Urban Professor

Ballin’ On A Budget

With commencement a fading memory much like the title hopes for the Boston Celtics’ “Big-3″, and the school year coming to a close, many past and present college students will be wondering where their next check will come from.  Having been both undergraduates and later graduate student ourselves, we understand how important it was to line up at the financial aid office to make sure that student loan check was straight so you could not only pay for tuition, but groceries (thank God for Ramen Noodles), gas and the first month’s rent!

Getting into debt for education is an investment.  Of course, some if not all of this debt can be absorbed with scholarships, financial aid, and grants, GREAT!  However, most times it isn’t, thus enters most college students first financial bully… Sallie Mae, and ironically her favorite song right now is by Rick Ross, “Where My Money.”  We have no qualms with owing Sallie Mae for education, but what gets the epic fail is when student loans are used for clothes, spring break trips, bottle service at the club, hair appointments, video games, and a variety of other luxuries that should be foregone until you have at least saved more “stacks” than you are in years, and have less debt than the size Jordan’s you may wear.  Now, we certainly know what it’s like to be a broke college student, but being broke builds character!  Well maybe not, but for most students being broke is a reality!  Student loan debt must be taken on with the utmost care and not spent frivolously.

Sky High Debt

Currently, the US student loan debt has ballooned to over $1 Trillion!  This explains how dependent most students are on loans, and also shows how we are taking on debt more freely and sometimes recklessly.  It’s so easy to go online and get another one, two, or ten thousand dollars that most students take out what they need and much more in the name of racks on racks on racks. Not understanding that after they’ve finished their education, gotten a “secure” job, and are ready to make payments, their loan balance could have more than DOUBLED!  We know how compound interest works in your favor when investing, however it works against you when borrowing.

Borrowing Smart

Now, we’re not going to grill you about how you need to clean up your student loan funded splurging without offering some friendly advice:

  • Before taking on your debt use a student loan calculator to understand what your payments will be after graduation. If you major in basket weaving and this job only pays $25K post graduation, you probably don’t want to commit to loans that will cost $500 per month. Take only the number of credit hours you can afford with scholarships, grants, and unsubsidized government loans, try to AVOID PRIVATE LOANS at all cost!  Yes, it may take you longer to finish, but once you do that extra year in school you will have a financial head start on your peers who   graduated before you with more debt.  Remember, Sallie Mae likes Rick Ross too, #WhereMyMoney.
  • Get a job to help subsidize costs. The more expenses you can afford to pay with the money from your part time gig, the less student loans you need. And hey, if you have some extra cash you can even make payments on your loans while in school!
  • Remember you are on a budget and trying to “BALL” before you can afford to will HURT YOU! This money is borrowed!  If your loan balance is too large it can affect your future by harming your credit score, preventing you from getting a mortgage and even affect your potential nuptials if your mate finds debt unattractive.
  • If you don’t finish you still OWE! Some students go away to school for a semester and figure out college is not in the cards, or that they want to travel, or have family issues that require time off. In any event, if you take on loans you will still be stuck with payments even if you never get your degree!

Student loan debt is serious business. You are making decisions at 18 that can and probably will affect you when you’re 30!  So borrow smart, spend wisely, and have a repayment strategy other than Y.O.L.O.  U DEFINE SUCCESS


www.cap1on1.com

November 13, 2012 by urbanprofessor

4 Reasons Not to Panic About Graduating Jobless

It’s officially summer and the only thing making a recent graduate sweat more than the weather, is the anxiety graduates have around not being employed after they did their best “cat daddy“ across the graduation stage last month.
June 21, 2011 by Urban Professor

B.M.F. (Borrowin’ Money Fast)

“You think you Big Meech. Larry Hoover. Gettin’ work…hallelujah. One nation, under God, real students getting debt from the jump start.”


#UnapologeticallyDriven