As too many students are painfully aware - a damaged credit report can derail your financial plans for law school and increase your stress levels.
Americans are fond of living on credit and there is a wealth of opportunity for students to obtain credit. Your ability to receive the best interest rates on many types of loans - educational, car, and home loans - depends on your credit, specifically on your credit score.
Lenders typically use three credit bureau reporting agencies: Experian, Trans Union, or Equifax. You cannot choose which credit bureau you want the lender to use for your credit review. You may have a negative credit item on one credit bureau’s report and not on another because creditors do not necessarily report information to all three credit bureaus - so you need to check all three regularly.
All consumers are entitled to one free credit report from each of the three major credit reporting agencies every 12 months. Students are encouraged to take advantage of this benefit. You can find more information at annualcreditreport.com.
Credit scoring is an automated way of evaluating your credit history against a number of pre-programmed criteria. In addition to finding negative credit items, credit scoring enables a lender to examine other criteria, such as credit card balances relative to their limit, an individual’s number of credit cards (even if they do not have current balances due), and slow payment history. These items are part of your credit "character" and affect your credit score.
If any negative credit items appear on your credit report, you should take whatever steps are necessary to resolve the issue. If the issue has been resolved but has not been removed from your credit report, you should obtain documentation from the party that reported the issue to the credit bureau. Most lenders have an appeal process so that you can submit documentation to clarify your credit history.
Find out more about credit scoring at myFiCO. To get your credit score, you will have to pay a fee. Each credit bureau will likely produce a different score for you.
The fastest growing Internet crime - and mighty scary if you know what kind of damage can be done by someone who steals your identity.
Some useful websites:
Some easy ways to protect your identity:
- Shred any mail or documents that contain personal identifying information - especially credit card offers. A cross-cut shredder is best.
- Never carry your social security card with you - leave it in a safe place at home
- Check your credit card statements each month for any unusual charges
- Check your credit report annually
- Never reply to any email that asks for your social security number, bank account number, etc. - most likely someone is phishing.
- Be careful of the personal information you reveal in chat rooms, on Facebook, etc.
- Not all wireless internet connections are secure - be careful - don't pay your bills online at Starbucks
- If someone promises you a lot of money in return for your personal information - be suspicious and don't give it out