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Law School Advises Students to Maintain Good Credit

By Faye Mergel
Published: Wednesday, December 9th, 2009

Having a good credit allows a person to have a home or car without paying for it upfront. It is also helpful in addressing needs when one is tight of cash. Professors from the University Of Virginia School Of Law are well aware of that, so they are encouraging students to keep their credit report neat and free from items, which could hurt their chances of getting good loan deals.

Law School Advises Students to Maintain Good Credit Consumers can start their credit history as early as college when they apply for a student loan. Students also begin putting items in their credit report by being cardholders. As of last year, 84 percent of overall student population in the United States already has a plastic in their wallet.

UVA School of Law’s Ben Grosz says credit can, likewise, be manifested on smaller scales. Someone who lends money to a friend, so he can buy soda from a vending machine is already extending credit. On larger scales, many Americans borrow in the form of mortgages, auto loans, and cards. Many students are also able to attend college because of student loans.

Grosz notes that a person cannot be called a borrower unless he can  get money through confidence from the creditor that he will be repaid for what he lends. To determine the ability of a person to repay, three large companies in the United States monitor every consumer’s activity and compile them in a single record called a credit report.

People who show in their credit report that they can be trusted with a mortgage or car loan will find it easier to borrow money whenever they have to. Grosz adds that a credit report also reflects a person’s trustworthiness and responsibility. That is why employers check the records of a person with Equifax, TransUnion, and Experian—three companies which compile reports from creditors.

Grosz observes that there is an increasing trend of credit report check among businesses, law firms, and government agencies. He says those institutions believe that a person who cannot be a good borrower will also not be a good employee or associate. Grosz adds that landlords also check the ability of students to pay and would charge them with higher rent if their records show numerous items of delinquencies and late payments.

Aside from being useful in loan and employment purposes, Grosz enumerated two other reasons why students should check their report regularly.  First, it allows student to know if they have become a victim to identity theft. Secondly, credit bureaus make mistakes, which could affect good credit. He concludes that doing a check annually could go a long way.

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