Five Ways to Improve Your Credit Rating After Student Debt | Evans-Crittens | Family Lifestyle Travel & Recipe Blog, Pembrokeshire, Wales, UK.

Wednesday, 26 August 2015

Five Ways to Improve Your Credit Rating After Student Debt

students at university

It's that time of year again where lots of freshers are eagerly and  perhaps, anxiously preparing to start their new course at university.  I have such happy (crazy) memories of my time as a student in Manchester.  I did well  socially and academically  but not so well financially (good job I was using my Maths degree to become a teacher and not an accountant!).


students at university

My Experience of Student Debt

As soon, as I secured a place on my chosen degree course, banks loved me and all wanted to offer me money.  Despite having a Grant, a Student Loan and eventually a job, I managed to use all the money I was loaned.  Each year the bank would extend my overdraft and my credit card limit.  If I had my time again, I would realise that an overdraft should be kept for emergencies and that it's important to pay off your overdraft when you can.  I began to see my account very  differently to how I view it now.  If my balance said £480 overdrawn and I had a £500 overdraft, then I would see that as £20 in credit to me.  It's crazy when I look back, but that's the way I saw it.  

students at university

I was useless with credit cards too.  I didn't even make any worthwhile purchases with them.  A lot of the time I would use my credit card as a cash card, for which I would then be charged heavily.  That is such a waste of money and makes me cringe now that I have the wonderful benefit of hindsight.  

students at university

So my first advice to students would be to get into the least amount of debt that you can (I realise that's easier said than done).  Always remember that the money banks are lending to you is purely that, a loan, a loan that will need to be paid back.

I remember coming to the end of my course and getting the letter about my Student Overdraft ending.  I didn't know how I was going to pay it all off in one go and felt very worried.

One phone call to the bank later and my overdraft had been extended again, this time I had a Graduate Credit Card, Graduate Loan and a Graduate Overdraft.

I remember reading in an Adrian Mole book, how he hated all banks as he had no money, and in the next diary entry stating that he loved them as they had extended his overdraft again and this was how I felt.   Now, I wish I had saved my new wages and started clearing the debt straight away post uni.

How to Avoid Student Debt



  • Get a part time job- I asked at every shop, supermarkets, pub and fast food place as soon as I moved to my university town.  Some work places will give you a transfer from your home town.  


  • Make a budget before you begin your course.  Work out how much spending money you will have left after rent, bills, transport and food then stick to this budget each month.

  • Pay all your bills on time.  Otherwise charges can add up and end up costing you a lot more.

  • I know it's tempting but try to keep your overdraft and credit card for emergencies only.  Make sure your overdraft is interest free and check the repayment terms.  

  • If you do need to dip into credit when funds are low near the end of term, then remember to pay them off at the beginning of the following term when your funds are healthier again.

  • The Importance of a Good Credit Rating



    After your graduation, you might want to travel, buy a house, get married, have children, who knows?  But I do know that the majority of these things will be easier or only impossible to do if you have a  good credit rating.  My mobile phone is still in my partner's name as when I left uni, my credit rating wasn't good enough to get a contract of my own.

    Five Ways to Improve Your Credit Rating

    The good news is, that even if your bad credit rating was unavoidable, there are things you can do to improve it.  

    • The first thing you need to do is check your credit rating to find out what is affecting your score.  The three main credit reference agencies to check are: Experian, Equifax and Callcredit.
    • Pay all of your repayments on time.  When creditors can see that you are working to pay off the debt, this works in your favour.
    • Make sure you are on the electoral roll.
    • Cancel all unused credit cards, debts and accounts.  
    • The way I cleared my debt and increased my  credit rating was to consolidate all my existing debt into one affordable loan, which I could easily make the repayments of.  Talk to a bank, such as TSB or an advice agency, such as Citizen's Advice to help find the right solution for you.
    What are your tips for avoiding student debt or increasing your credit rating?

    In association with TSB








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    14 comments

    1. Every time you take a new credit card out it leaves a 'footprint' on your credit rating and avoid store cards like the plague - their interest rates are usually sky high.

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      1. Oh yes, I hate being pestered to take out a store card. x

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    2. Claire you look so different!
      Great post, I didn't go to Uni but still had credit card & loan offers thrown at me when I was 18, I hadn't long come out of a serious relationship so I went a little crazy and got myself into a lot of debt. I too saw my overdraft as a goal rather than a limit! I really think that they should up the age for borrowing, at 18 I certainly wasn't mature enough to be loaned thousands of pounds.

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      Replies
      1. Haha! I was clearly having a bad day in the top photo! lol. It's crazy, isn't it? x

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    3. Great and timely post! I was in much the same situation and just didn't know how to sort it all out. It took me a few years to repair the uni damage

      ReplyDelete
      Replies
      1. Yeah, it's a difficult time, isn't it? x

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    4. Loving the pictures!! Such a great post. I agree they def need to up the age of borrowing! x

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    5. Great pics! I was lucky enough not to get a credit card (I was so scared of missing repayments, and still won't use one today) but still ended up with student loan debt to pay off. It's so tempting to get sucked into spending money that isn't yours!
      Alana x

      ReplyDelete
      Replies
      1. It is so tempting. I no longer have any credit cards either. x

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    6. Great post - my eldest daughter is going into second year of Uni and we were talking about this today!Kaz x

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      Replies
      1. Thanks, I'm dreading mine going lol x

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    7. Oh god, student debt... it's a nightmare isn't it and so easy to get yourself into a right mess. When I think about where most of my student loan went; let's just say I would spend it very differently now! Great post Claire :)

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      1. Haha! Yes, definitely. I remember someone saying to me you could sell everything you spent it on but there was nothing really to show for it. We had such different priorities then x

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