Credit in College: Easy to Get, Easy to Ruin
Once locked in, a system of accountability will prevent surprises and unnecessary headaches. Set up a common checking account where each roommate pays her bills. If one person doesn't deposit her share, everyone else will be able to see it and confront the person right away. This way, there won't be any surprises at the end of the year.
Identity theft
The sad thing is that you can do everything right and still run into financial disaster. Brendan Classen, a junior at the University of Minnesota, found that out the hard way. While applying for a car loan, Classen discovered that someone had used his name to set up four months' worth of cable service at an address where he had never lived. The bills went unpaid, and the collection was filed on his credit report.
It's no secret that identity theft has become pervasive, and the victims have become increasingly young. Reduce your risk by shredding any papers with important information, sparingly giving out your Social Security number, and boosting your online security. But even the most cautious can become victims. Classen suspects someone lifted his information from one of the many applications he filled out during a job search blitz, while the ubiquity of preapproved credit cards and Social Security number use has made all consumers more vulnerable.
In the end, the best way to deal with identity theft is to catch it early. Even if you're sure you've paid all your bills on time, check your credit report at least once a year and definitely before any major financial moves. Myfico.com compiles credit reports and scores from the three major credit bureaus. The bureaus, Equifax, Experian, and TransUnion, also provide reports (which are free once a year) and scores from their own sites. Classen got the loan despite his trashed credit, albeit with a much higher interest rate. He'll be able to refinance six months after he was first approved, but the headache of clearing his name lingers. Partly because it's been months since the cable account was abandoned, Classen continues to wrangle with the cable company, collections agencies, and credit bureaus. The lesson? The earlier you catch mistakes or theft, the easier it is to get it fixed and off your record.
More about credit:
• Building Good Credit: A Guide for Young People and Parents
• Who Checks Your Credit Report?
• Putting Teens on the Path to Good Credit
• Credit Reports and Scores: FAQ
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