I'm currently a 20 year old engineering student in college and I've been reading some books on personal finance in the hopes of being educated before I start making real money rather than after. I find that many of my fellow classmates have credit cards (and max them out with virtually no way to pay more than the minimum) and those who graduate go out and buy new cars/house/etc... tying up their whole paycheck in debt (it seems they forget about student loans since they have a 6 month deferment after graduation.) My credit report is relatively bare, with the exception of a couple of utilities, a Walmart credit card, and one derogatory (we'll get to that later). My question is, how do I improve my credit score while in college so that when I graduate I will have the option of taking out a loan (for example: for a car with decent interest rates). Granted, I'm not a huge fan of borrowing money (my ideas are to save up until you have the ability to buy outright); however, in this day and age my ideas are utopian at best. There are things you need to take out loans for ie. house, car, etc... My current credit score is 682 and I have an acccount with true credit to keep an eye on any potential threats to my identity/score/report. I would like to get a credit card with a low max but I can't get approved for one. Is this due to the current credit situation? If so, what can I do to improve my credit? The derogatory I have is medically related and is listed on two of the three reports. On one of them it is listed twice. My insurance was supposed to pay a debt and the problem has been taken care of now; however, it still appears on my credit report as a derogatory. Since it was no fault of my own, should I appeal to the reporting agency? If so, how do I go about this? Additionally, on of the reports where it was listed twice the information given on the second occurence said the original amount owed was $242 and the current balance was $0. If this was the case, why was it reported as a negative on my report. As I said, I'm totally new to all this and hope you guys could provide some info!
Kudos to you for taking it upon yourself to learn about credit/personal finance! I wish more young adults would realize just how important all of this is before they graduate and start living in the real world. Take a look at some of these articles I wrote in our College Credit section- they'll give you some good ideas about how to manage your credit responsibly while in school: Featured Articles- College Credit Regarding the medical debt on your credit reports, this is definitely something I would dispute through the CRAs. It may be listed twice because one is a charge off ($0 balance) and the other is a collection that was reported when it was turned over to a CA. If you have documentation to prove that this whole thing was no fault of your own, dispute it as incorrect through the CRAs in writing. Have you spoken with the OC (medical provider) in the past as well? Oh, and have you applied for a student credit card and been denied? Due to the new rules Obama passed last year, you'll usually need to have a parent cosign or a high enough income to support the credit limit in order to get approved. Plus, a lot of these students credit cards require a score above 700. If you want to compare more credit cards for fair credit, check out our reviews here: Fair Credit Credit Cards. Even in todays tighter credit environment, you should be able to get approved with a FICO score around 680-700. The Capital One No Hassle Cash Rewards credit card is pretty popular card for this credit level.
