Instructions: Make sure you include all the part of an academic paragraph in MLA format with a works cited pages, and remember to address all the questions that we decided our reading audience needs to know. The questions were:
1. What is credit and FICO scores?
2. Why should a college student today care about credit?
3. What can good credit or a good score do for a college student?
4. What can bad credit or a bad score do to a college student?
5. How can a student "correct" bad credit and/or keep or build good credit?
Melissa Stebbins
Julie Grey
English 102/108
02 March 2011
The Fundamentals of Credit - What Every College Student Should Know
The United States is experiencing serious financial hardship. Job shortages also mean increasing debt for consumers. With all this debt piling up around us, it is important to understand credit and credit scoring, so that we may protect ourselves from the stigma of bad credit.
A survey conducted by Sallie Mae in 2009 showed that 84% of college students own at least one credit card. Less than one-fifth of students pay their balance off every month and the average debt was about $3,200. Recent changes in legislation have put restrictions on credit card offers to anyone under 21. They say that lack of basic knowledge makes them vulnerable (Wiles). Apparently we need to show the credit card companies a few lessons on ethics.
Perhaps you are asking yourself, "What is the big deal?" The big deal is, having bad credit can be very annoying. It can increase insurance rates and interest on loans, decrease loan amounts, and even prevent you from gaining new employment. Potential employers can view your credit report, as well as utility/phone companies and insurance providers (Irby). Although it seems terribly unfair, you can be judged in many ways, by your credit.
This system of judging a person's credit-worthiness was developed in the 1950's by an engineer and a mathematician, who later founded Fair Isaac and Co. They calculate your credit score by using a top-secret mathematical formula. All we know of this formula is that it contains info from the following areas, length of credit history, credit mix, new credit, payment history, and how much you owe (MyFICO.com).
It is a good idea to be aware of and check your credit report annually to see if there are any errors and to watch for identity theft. You are entitled to one free credit report every year, from annualcreditreport.com. This is separate from your actual credit score; if you want to know your credit score, you can inquire at one of the three major credit reporting agencies, Equifax, Experian, or TransUnion. They charge a fee, usually around $7.00(wiki).
As college students, not all of us have a steady source of income. That means credit cards of kind of dangerous. Here are some tips on credit cards for college students from myamazingfact blog. You need them less than you think you do. Interest rates are murder and many companies like to lure you in with "low introductory APR's", so be carefull. Always make more than the minimum payment. As I mentioned earlier, your credit score is your best asset, it can make you or break you. Not all cards are the same, choose one with good perks, like cash back bonuses or flyer miles. Credit cards are not money. Ignoring your balance means drowning in debt. Timely payments can save you. If at all possible, avoid credit cards, but if you can't, just remember that responsible use is good.
There are plenty of resources for use on the internet, and getting advise from your financial institute is easy. Beware, there are predators out there, and we college students are vulnerable.
Melissa Stebbins
Julie Grey
English 102/108
28 February 2011
Works Cited
"10 Things College Students Should Know About Credit Cards." Amazing Facts. 02 Nov. 2010. Web. 03 Mar. 2011.
"Credit Scores: Understanding All 3 Scores & Where They Come From." Free FICO Credit Score Check Your Credit Report Online | MyFICO. Web. 28 Feb. 2011.
"FICO." Wikipedia, the Free Encyclopedia. 24 Feb. 2011. Web. 28 Feb. 2011.
Irby, LaToya. "10 Side-Effects of Bad Credit." Credit / Debt Management - Credit Repair Improve Credit Score and Pay Off Debt. 8 Sept. 2010. Web. 28 Feb. 2011.
Wiles, Russ. "Credit-card-reform Legislation Singled out College Students." Arizona Republic 03 Apr. 2010, Final Chaser ed., Business sec.: D.1. Print.
The big deal is, having bad credit can be very annoying. It can increase insurance rates and interest on loans, decrease loan amounts, and even prevent you from gaining new employment.
Capitalize Internet.
I don't see many errors! This is pretty simplistic, but it is written with a nice style.
Wiki is not usually an acceptable source, but if you use it, capitalize it.
Nice job! If you dig a little deeper and cite a few articles that offer unique insights and strategies, you can make this a great success. For example, read an article written in the past two years about credit cards, and write a paragraph about the main idea of the article.
:-)
