Avoid Credit Hassles?
Secrets to Establishing and Keeping Good Credit
Oct 12, 2011 | 1833 views | 0 0 comments | 4 4 recommendations | email to a friend | print

Avoid Credit Hassles?

Secrets to Establishing and Keeping Good


As hundreds of thousands of parents send their kids off to

college in the coming months, many of them will be wondering if it marks the

last time their children will be living under their roofs.

According to a study conducted by Twentysomething Inc., a consultant

firm specializing in young adults, 85 percent of the class of 2011 will wind up

moving back in with mom and dad once they get their degrees. The cause? A

combination of a shrinking entry level job market and crushing college loan


“The average student accumulates over

$23,000 in student loan debt and $4,000 in credit card debt during their years

as an undergraduate student,” said Gabe Albarian, a former college student who

avoided his own credit crisis during his college years by following the advice

he offers in Financial Swagger (
www.financialswagger.com), a guide for

young people who want to escape the pitfalls of credit disaster. “All these

stats basically tell the same story: our next generation of college graduates

will enter the next phases of their lives in a personal finance hell composed of

a combination of crushing debt and poor credit.”

But it doesn’t have to be that way. Albarian has composed a few tips

aimed specifically at helping those who are just entering college or about to

graduate establish and keep a good credit rating. They include:

  • New Credit Cards – Credit card companies

    love to hammer new students and new graduates with seemingly generous offers

    of unsecured credit cards. Don’t take the bait. There are other ways to

    establish credit without opening yourself up to the slippery slope of

    introductory interest rates that change after 6 months or the temptation to

    use that credit to live above your means.

  • Authorized Users – If your parents are

    financially responsible (not always the case sometimes) and pay their bills on

    time every month, I suggest that you be added as an authorized user on their

    credit card. Make sure to provide your personal information and social

    security number to the credit card company so that your credit history report

    will reflect transactions performed on this account. In about six months,

    after you’ve learned with the authorized user training wheels how to manage

    your credit reliably and maintained a responsible payment history, you will

    receive your own credit card offers.

  • Secured Credit Card – The temptation

    will be to apply for an unsecured credit card, but that’s still not wise or

    necessary to establish good credit and good habits. Instead, apply for a

    secured credit card at your local bank. With a secured credit card, you place

    a nominal amount of money in a savings account that cannot be withdrawn as it

    is used as recourse to pay back your debts in case you do not pay them

    yourself. In essence, your spending limit on your secured card is exactly the

    amount you place in the linked savings account – hence, your debt is secured

    by the money in your account. Just like a normal credit card, you will receive

    a monthly statement to pay off a portion or all of your debts but meanwhile

    your payment history will be reported to the credit bureaus. Within months you

    will receive offers for other unsecured credit cards. It’s not necessary to

    have more credit cards than you need, because not only will it present

    temptation, but it may also lower your credit rating.

“The bottom line here is that once you have use of a credit

card, you want to pay your bills on time, keep your balances low, don’t take on

more credit than you need and if you’ve missed a payment you should get current

and stay current,” he added. “Good credit can be your best financial friend as

you go through life and bad credit can be the ball and chain that drags you


About Gabe Albarian

Gabe Albarian, a 28 year-old businessman has worked in real

estate sales, finance, and investment for nearly 10 years and has done extensive

consulting work in personal finance for both individuals and groups. He earned

his undergraduate degree in Political Science at the University of California,

Los Angeles and is currently pursuing his Masters in Business Administration

with an emphasis in Finance at the Marshall School of Business at the University

of Southern California.

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