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How Does Your Credit Report Affect Your Children’s Education?

By Derek Brown
Published: Friday, July 2nd, 2010

Credit report is all about the history of debt you acquired through the years and how well you have responded to these. If you were a good payer then there is no need to fret about the credit report. But if you have done pretty worse in paying off your debt list then there are the usual repercussions such as bad credit and collectors harassing you in every way possible. But just when you thought that was the worst thing that you will experience when you have bad credit, think again. If you have children, then you might want to read this more closely.

Nowadays, education is viewed as a commodity and a necessity. Despite the fact that it is being commercialized, most people still want to finish college in order to get a good job and find employment. But sending our children to school is a financially draining event. Aside from the tuition fees that are increasing every year, other miscellaneous payments must be done for the books, school uniforms, field trips, laboratory fees, and so forth. If the family does not have enough spare cash for these expenses then the options available are that of getting a scholarship or applying for a student loan.

While there already are Stafford, Perkins, and PLUS loans (which are given not on the basis of satisfactory credit report), the three also have a loan ceiling per application. If a student needs more money than what can be given by any of the three loans then he or she must apply for loan at a private lending firm. And all lending firms are business-oriented. In contrast with government-subsidized loans, these lending firms want to make sure that they will get their money back and the most accurate measurement of your paying abilities as a borrower is your credit report.

In addition to that, private take a shorter time before getting approved. This type of loan is perfect for short-term, urgently needed money. However, as what is stated above, private loans require good credit reports. If the student still does not have a substantial amount of credit information then it is the credit report of the parents that will be viewed. And bad credit will surely increase the chance of having your application denied.

Simply put, if you do not want your child to experience being denied of the loans needed, keep your credit history straight. Aside from moral support, hat is the next best thing that you can do in order to make sure that your child will be able to graduate from college.

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