By Bill Druliner
GreenPath manager and counselor
Many 2014 college graduates are basking in the glory of wrapping up their bachelors or masters degrees this month. However, in many instances, their downtime will be short-lived. Shortly, they will face even more responsibilities, ranging from landing that first job to paying off their student loans.
Negative marks on a credit report could impact a graduate’s ability to secure an apartment lease. Also, as more hiring departments take personal finances into consideration, recent college graduates need to make sure their credit and debts are in order.
In order to help make the transition from college to the work world go smoothly, GreenPath Financial Wellness is providing a top ten financial checklist for recent college graduates.
- If you do not already have a job lined up, contact your student loan servicer(s) immediately to ask for a six-month deferment. Most loans will do this for you right after you graduate without much difficulty. The last thing you want is to start getting negative marks on your credit right away for not making the student loan payments on time.
- Pull a free copy of your credit report at www.annualcreditreport.com and review it to make sure you are aware of all your existing creditors and debts.
- Look for credit cards that you may have opened while in college and consider closing accounts that you do not plan on using, to help limit your exposure to identity theft. However, keep in mind that it is good to maintain at least one active credit card account, which you use and pay in full every month, to build your credit score.
- If a prospective employer requests a copy of your credit as part of the application process, be prepared in your job interview to be up-front about any negative marks on your credit. Employers will want to know that you are aware of the negative marks and that you have a plan for dealing with your current credit situation.
- Check with the registrar’s office at your school to make sure you do not owe anything to the school (library fines, parking tickets, etc.). Sometimes these debts can cause the school to withhold your diploma, until they are paid.
- If you are moving after graduation, be sure to let the post office and your creditors know of your new address. Otherwise, you may miss important statements or letters regarding your student loan, credit cards, or other debt, and that can lead to missing payments and negative marks on your credit report.
- Keep your expenses as low as possible while you are getting started. Don’t rush out and buy a new car within two weeks of your first job offer. Don’t feel the need to take on larger expenses in your
budget such as an apartment of your own right away. Staying with your old roommates or parents for a period of time to build some savings can really pay off.
- Develop a budget – a plan for your spending – early on. Decide how much you’ll choose to spend in different areas of your budget – groceries, dining out, clothing, etc. Once you begin receiving a paycheck, it is likely that you’ll have more income than you’ve ever had before. But it can be very easy to quickly wind up with the cash slipping away without a clear idea of where it has gone.
- Once you land that first job, use this as an opportunity to develop good saving habits. Start a direct deposit into savings. Sign up for your employer’s retirement plan – especially if there’s a match. In addition, if you’re carrying credit card debt, begin aggressively reducing those balances to minimize the amount of interest you’re paying.
- If you are paying high interest rates on your credit cards; if you’re struggling with the amount of your minimum payments on credit cards; or if you need help in developing a game-plan for your finances, speak with a non-profit credit counseling agency. These agencies will help you develop a budget and action plan to tackle your debt. Most counseling sessions are free. Log on to www.greenpath.org, the National Foundation for Credit Counseling at www.nfcc.org or the Association of Independent Consumer Credit Counseling Agencies at www.aiccca.com for more information.