Credit Management Tips for Young People

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Young people are coming out of college strapped with debt and entering a job market of slim pickings. Many of these young people are not finding employment or are forced to return to the kinds of minimum wage jobs they had back in high school. As such, it can be very easy for young people in these situations to let their credit slide, which is dangerous as your credit score can affect your employment candidacy.  Here are some tips you can do to avoid those credit pitfalls.

And if you’ve missed a few payments already and find yourself being harassed by debt collectors, CRP can help. Find what what debt collectors are and are NOT allowed to do.

 

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Student Loans:

Student loan repayments can be like a natural disaster to many young people’s credit scores. These huge repayments without an adequate job can quickly get away from you and can be hard to clear up. Here are some ways to lessen their burden.

Deferment:

Many of you might be eligible for unemployment deferments (sometimes called financial hardship deferments); if you are working less than 30 hours a week you should qualify for this deferment, which grants you 6 months of no payments. These can be extended based on your ability to find work.

Consolidation:

One of the best options to tackle your financial loans is to get them all wrangled into one loan and one monthly payment. You’ll have to look at the terms carefully as some shadier places on there prey on college grads looking to consolidate by amping up the interest rates.

Income Based Repayment:

This plan might be one of the great repayment plans of the past century. With an IBR, you set up your monthly payment plan for the next year based around what you made the previous year. For many who earned some money but still fall below the poverty line, that amount might be $0. The plan also falls into the 25 year forgiveness guidelines–unlike deferments, which just push it down the road; this means after 25 years, whatever amount owed is left is forgiven.

Other Monthly Payments:

One of the major reasons these kinds of monthly payments can get away from you is simply by forgetting to send it in on time. The late fees of one bill can trickle into the inability to pay another, etc., etc. One way to help with this is to set up auto debits from your bank account. You’ll have to make sure the money is there on time but you won’t have to worry about scrambling to meet the deadlines every month.