Money Sense Tips

When a student applies for financial aid, usually the college will award the cost of attendance and/or a fixed amount.

For example, an undergraduate may receive up to $4000 per year (maximum total $20,000), while a graduate may receive up to $6000 per year (maximum total $40,000).  There are conditions, however.  The amount received depends upon financial need, if any other aid is given, and if the funds are actually available through the college.

It is important that a student does not borrow more than he or she needs.  Tuition, housing (if applicable), books, and incidentals are the important items for a student to consider when applying for a loan.

If you borrow more than is needed, that is more that you will have to pay back, especially if you have applied for an unsubsidized loan.  Think of the interest accrued!

The financial aid office will give the student the maximum amount he or she qualifies for.  That doesn’t mean that utilizing the entire amount is appropriate.  Also keep in mind that some loans have fees, such as the Stafford Loan.  These fees will be deducted from the loan before a check is forwarded to the college.

The best way to determine how much you need is to visit the college website and/or visit the college in person and make notes of approximately how much it will cost per year.  Once you have this information, apply for the loan as soon as you are accepted.

Make an annual checklist of expenditures so that you can keep a running record of how much you spend per year.  If you need to borrow additional funds, speak to the financial aid counselor to determine what type of loan you need and qualify for.

Keep in mind, too, that applying for an additional unsubsidized loan will require that you make interest payments while attending college.  This will cost less in the long run than letting the interest accumulate and paying a hefty sum after you graduate.

If you are interested to find out more, check out StudentLoansMentor to learn how to get a better loan.

Our credit scores play a big role in determining the results when we apply for a credit card or loan. A good credit score can help us get the credit we need at the best possible rate. A poor credit score could result in a higher interest rate or denial of credit. It is in our best interest to make sure our credit scores are as high as possible.

The credit bureaus keep the exact method for figuring credit scores a mystery. But there are a number of factors that are known to impact our credit scores. Here are five things you can do to improve yours:

1. Keep an eye on the information contained in your credit report. Sometimes the bureaus make mistakes, and identity theft can also wreak havoc on one’s credit report and score. Federal law requires each credit bureau to provide one free report per year to any consumer who requests it online, by phone or in writing, and we are also entitled to a free report if we are denied credit. So check your report regularly, and if you find any inaccuracies, dispute them in writing.

2. Always pay your bills on time. Even if you’ve made payments late in the past, keeping current bills paid on schedule will help raise your credit score. The longer your history of keeping payments current, the more it will improve your credit score.

3. Keep credit card balances low. Just because you have a $10,000 credit limit, that doesn’t mean you should use it all. A good rule of thumb is to keep each credit card balance at or below 25 percent of the limit. Even if you have a perfect payment history, carrying too large of a balance can adversely affect your credit score.

4. Avoid opening too many accounts in a short time frame. This is especially important if you have a short credit history, but it also applies if you have well-established credit. Opening lots of accounts in rapid succession raises concerns that you could get in over your head, hence lowering your credit score.

5. If you pay off an account, keep it open. This will help by lengthening your credit history. It can also reduce your balance to credit limit ratio, unless you transferred the balance to another card.

Improving your credit score is not as difficult as you might think. A few simple adjustments can really make a difference, but it does take some time. If you are planning to apply for credit, start working on your credit score a few months ahead of time. This will increase your chances of getting the loan or credit card, and it could save you lots of money on interest.