Take Care Of College Debt Before Graduation Day

By Uloop Guest Writer on April 23, 2014

Photo via StockMonkeys.com

If you are like most college students, as you continue your journey through college, your mind is focused on your future. Perhaps you have clear plans for what kind of career you will pursue after graduation, which company you want to work for, or even the type of business you wish to start. Or, maybe, you have dreams of going on to graduate school.

Unfortunately, like most college students, you may also be facing a lot of debt.

As of 2013 the average college student has $35,200 in college-related debt including federal and state student loans, private and personal loans and credit card debt.

All of this debt not only makes your life more stressful, but if you get behind on your debts it can also negatively affect your future.

How it Affects Your Future

Many employers do credit checks on potential employees, as do potential landlords and even insurance companies. If you are starting your own business, your personal credit history can determine your ability to get a business loan. Some companies might even do a background and credit check on potential contractors.

Many of your student loans won’t come due until after you graduate, but credit card debt is another matter entirely. The average college student has $3,000 of credit card debt. That may not seem like much, but if you have gotten behind on your payments, or if you have multiple cards, they can seriously damage your credit.

All of this means that even if you have the best resume, and excellent negotiating skills, a history of late and low payments could ruin your chances of getting that job, or finding a decent apartment.

Even if you are keeping up with your payments, and your credit history looks good, you could be setting yourself up for trouble later. If you are one of the estimated 90 percent who does not pay the balance in full each month, carrying that balance could keep you on the hook with the credit card companies for years to come. Also, that balance could read as excessive debt, which is just as bad as a poor payment history.

Protecting Yourself

Your first step should be talking with an agency like Lexington Law that helps with debt consolidation and credit counseling, whether you are behind on your bills or not.

A credit counseling, or debt consolidation, agency can look at all of your debt, including any personal or private student loans, to help you come up with a plan for consolidating or repaying them. In some cases they can even help you negotiate a lower interest rate and better monthly payments than if you had tried to handle your creditors on your own.

Even if you don’t consolidate your debt or use their services to make a payment plan, these companies can offer a lot of guidance on how to best handle your financial situation, before it gets out of control.

Additionally, if you do have trouble with your debts, working with one of these companies you also show your creditors that you are willing to work with them, which could look better on your credit report.

If possible, you should get on top of your debt long before you graduate, even if you think things are fine. Taking control of your situation now can protect you from a lot of grief and heartache in the future. So that, come graduation day, you can be more concerned about how many parties you’re going to hit, instead of how many creditors you have to pay.

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