People who want to avoid racking up high consumer credit debt and damaging their credit score for years are generally advised to get started with responsible personal finance during their college years.
A recent Boston Herald report recently profiled Michael Mihalik, who ran up substantial credit card debts during his time as a University of Washington student and who recently published a book on personal finances. The report noted that by age 24, Mihalki had about $10,000 in credit card debt.
“I justified (purchases) by thinking I was getting an engineering degree and I would be able to pay (the balance) off in six months. But it didnt work out that way,” Mihalik told the Herald.
The report noted that it generally takes seven years to remove an unfavorable item from one’s credit score, which underscores the importance of making all payments on time and avoiding running up excessive balances.
Students will get some relief from aggressive card marketing practices in a federal bill whose provisions will take effect in early 2010. The law, among other things, will require people under 21 to have a parent or guardian co-sign for them, or to otherwise demonstrate they can pay, when applying for a card.
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