Monday, March 17, 2008

Credit for Young Adults

Why Do You Need Credit?

As a young adult, you'll need credit for immediate reasons like the following:

  • Renting an apartment
  • Getting phone service
  • Financing a car
  • Paying tuition, book, and other school expenses
  • Spreading out payments on high-dollar items

With a good credit history built up, you'll have access to credit later on for things like the following:
  • Getting a job
  • Qualifying for loans for cars, furniture, wedding expenses
  • Making urgent repairs to your car
  • Getting emergency medical care
According to the Jump$tart Coalition for Personal Financial Literacy, the average high school graduate lacks basic personal financial management skills. Yet, two-thirds of college students currently hold credit cards. What happens between the lack of skills in high school and the responsibility of credit in college? Not enough education, according to many experts. Although college prepares young adults for the job market, many graduates enter the real world with a "learn as I go" approach. This lack of education, combined with financial management trial and error, is a recipe for disaster.