5 credit tips for college students

3:30 PM college, Credit, students No Comments

| By A.J. Smith, Credit.com

There's a lot to do when you go off to college, and managing credit is usually far down the to-do list. It's important to learn how to use credit cards, though.

There’s a lot to think about when you’re in college. There are classes, friends, internships and parties to worry about. But what many of us probably should have been thinking about a lot more was our credit. In fact, now that we’re older and wiser, there are a lot of things we wish we would have done differently when it comes to our credit.

Unfortunately, there’s no freshman orientation on building credit. So a lot of students fail to grasp the reality of responsibly using a credit card until it’s too late. They might even graduate with a pile of credit card debt on top of their student loan debt. But instead of trying to prevent college students from getting their hands on credit cards, it’s important to teach them about proper use.

Here are five credit tips that every college student should know.

Staying away from credit cards completely won’t help build a strong credit profile. Since a large portion of your credit score is determined by your credit history, the earlier you establish lines of credit, the better.

Whether you like it or not, credit is becoming more and more important in aspects of every day life. Things like mortgages and car loans require good credit, so if you ever plan on buying either of those items you’ll need a good score.

It’s nearly impossible to get approved for a regular credit card if a college student has no income. But it’s easy to be added to a parent’s credit cards as an authorized user. All it takes is a phone call.

This is one of the best ways to establish credit without having to apply for your own card since there’s no credit inquiry and your credit report will reflect the same credit utilization rate as your parent’s card. (Just be sure your parent has good credit.)

Since it’s difficult to get approved for a regular credit card while you’re in school, consider applying for a student credit card. The limits on these cards are low, but they are a great way to establish credit.

Having a student card will also give you an opportunity to learn how to manage your money, pay monthly bills and spend responsibly.

It’s important to realize that your credit card bill should be paid off in full every month. If you can’t pay your balance in full, you’ll start to accumulate interest and fees and that’s what the credit card companies thrive on. Treat your credit card like you would your bank account and don’t ever spend more than you can afford to pay back immediately.

If you want to understand how credit card companies and banks view your credit it’s important that you understand your credit report. You should check your report for accuracy at least once a year in order to ensure that all of the information listed is correct, and dispute it if it is not.

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Students feel unprepared for world of work

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College graduates say their school hasn't adequately prepared them for work. In this April 4, 2012 photo, college students attend a job fair for students in Manchester, N.H.
A college education is no guarantee of a job and even if they secure internships, a quarter of college students feel unprepared for the working world, according to a survey released on Tuesday.

Graduates face the reality of unemployment among 20- to 24-year-olds at over 13 percent and many potential employers who won't hire them full-time even if they serve as interns for little or no pay.

"We found that a bachelor's degree is the new high school diploma," said Dan Schawbel, founder of Millennial Branding, which released a study of students' views on the job market. The online survey, conducted May 16 with Internships.com, polled 1,345 college students across the country.

It found that while 57 percent think internships will be extremely important in helping them learn real world skills and land jobs, almost as many think colleges aren't providing them the access to internships that they need. "Internships help because it's evidence that you've done work," Schawbel said.

Unfortunately, for many students, the world of internships is not that simple.

In a 2012 survey by Millennial Branding, 91 percent of the employers responding said students should have one to two internships before graduating, but only half had hired interns in the previous six months. Also, a solid majority of companies said they hired no more than 30 percent of their interns for full time jobs, and 87 percent offered internships that were shorter than they liked to see on resumes.

Labor Department rules say that if internships are unpaid, they have to resemble vocational education, and interns cannot be asked to do work that paid employees could perform. But companies may not always follow these rules. In fact, some have been sued by former interns claiming labor rule violations.

Camille Olson, who chairs the complex discrimination litigation practice group at Seyfarth Shaw, says a number of companies have taken steps to beef up their internships.

"A number of them have revised their programs to ensure that they are conforming to the 'benefits to the interns' part" of the rules on internships, she said. And she adds that potential interns can gather intelligence on the quality of internships using social media, or seek out current interns to hear about their experience.

But even if internships are improving, there is the matter of who can afford to seek them out. With tuition at many private colleges running close to $50,000 a year, many students are working while they are in school, and have little time for an unpaid gig.

Olson points out that some colleges offer financial aid or subsidies for students taking internships with nonprofit organizations.

For his part, Schawbel recognizes the potential shortcomings of internships, but says they still offer invaluable training.

"You can't prove yourself by taking a college course. You can prove yourself by getting internships," he said, adding that he himself has had eight. "A lot of students have loans, and to do an internship while working in a restaurant to pay the bills—there is a lot of pressure right now. But that's the the game you have to play. It's the 'do whatever it takes' model."

Memo to Mom and Dad: you might want to get your child's bedroom ready for a returning tenant.

© 2013 CNBC LLC. All Rights Reserved

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Ex-Google Exec helps companies to avoid life students

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Four months after leaving Google, the former head of the business enterprise has help to avoid a new mission - college graduates, the big companies like Google.

Upstart, graduates a service that can be in the form of restricted on Wednesday University Launches money from other people online so that they can start their own businesses, pursue a research project or a personal dream to chase rather than to a "safe" job in the corporate world.

"There is this overwhelming desire, is not the traditional way of bolting itself at a table and climbing the corporate ladder," upstart said founder Dave Girouard.

But he said that too many graduates have must they pay back and feel not College loans, they can get a chance.

Part social network, part offers Crowdfunding service in the style of the Kickstarter, upstart an online forum where the participants personal profiles with pulling their background and goals in the hope of at least five donors after.

The people behind - notable, alumni or other accredited investors - to deploy financing agreed usually $20,000 to $50,000 in exchange for a share of the graduate future income over a period of time will range from 10 years. Upstart determines that allocated the part of future annual income levied on the basis of the total and the qualifications of the person, including academic and field of study.

Girouard found funding is different from a loan, because there no guarantee for the repayment are.

"It is a contract that quota has some payments really," he said.

Upstart is the latest example of so-called Crowdfunding and peer-to-peer lending online services that have sprouted in recent years. Kick start, people online to build money for "creative projects" such as movies, clothing and even robots can, has $250 million promised projects by more than 2 million people since launch 2009 according to the company seen.

Upstart is not just about young people with capital, but to connect them with people behind who can act as mentors, Girouard said.

Girouard, who President of Google's online applications, which competes with Microsoft Corp, said large companies offer many important advantages for some graduates, but go company is not right for everyone.

New graduates setting out on their own can finance provide a way, college loan payments or take over cost of living for a year.

The maximum annual income obtained, a borrower on the hook for can be seven percent and a borrower is more than 15 percent of the total liability never for repayment received. No payments must be made in the years when the quality of annual income is less than $30,000, according to the company.

Upstart, the came with a team, which includes several former Google employees started, received $1,750 million seed capital from investors including Kleiner Perkins Caufield & Byers, Dallas Mavericks owner Mark Cuban, and Google ventures.

The service will first of all for students and graduates from five schools - Dartmouth College (Rhode Iceland) School of design, Arizona State University, University of Michigan and University of Washington but hopes came to many further expand in the first year.

And with the U.S. unemployment rate now in the fourth year of 8 percent, Girouard is so think it a good time to enter of the workforce to outside the box.

"In the year 2011, there was zero net job growth in large enterprises," Girouard said. "You have such a really ugly situation, where children of tons of stand in line... and they are in line for orders, essentially no longer exist, or are actually harder to get."

Copyright 2011 Thomson Reuters.

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