Keeping a Good Credit Rating
- Limit the number of credit cards you have. One or two is
- Make your monthly payments on time. Even if you just pay the
minimum balance, you must do so in a timely manner.
- Reduce or pay off your loan balances before law school.
- Obtain a copy of your credit report(s) once per year.
Correct any mistakes.
- Beware of “hidden” credit accounts. First, close all
accounts you aren’t using, like old department store accounts.
Second, check to see if some of your services are treated like
credit accounts (e.g., cell phones and ISP accounts).
- Give up luxury goods. ACCESS, for one, believes that a
student does not need a cell phone. If you wish to claim poverty
to receive financial aid, you need to demonstrate it. Cell
phones and sometimes even automobiles are suspect.
A special note about "good credit."
Some—well okay, only a few—of my students do not have credit cards.
This can be a problem if you have to apply for loans to go to law
school. Private lenders need to see some kind of credit history, and
they may prove a bit leery of you if you have no credit history at
all. To establish a good credit history, obtain one (yes, one is
enough) credit card, use it wisely, keep your balance low, and
always pay your bills on time. There is nothing wrong with good
credit; indeed, it will help a lot when it comes time to get a
student loan or buy a house. You need to be very careful, however,
to use your credit card wisely to avoid the common pitfalls that
most students face.
The other practical reason to have one credit
card is that it will facilitate your law school application process.
As mentioned earlier in this CD-ROM, most of the process is now
electronic, and the fees are paid by you electronically by credit
(or debit) card.