Students are responsible for any debts incurred prior to matriculation. Credit card debt, car loans, and any outstanding bills must be taken care of by the student; financial aid will not be awarded to pay off these debts.
A negative credit rating will cause ineligibility for some student aid programs. Private/Alternative Loan programs require a credit check on the borrower and/or co-borrower as part of the application process. Most of the programs require a borrower to be "credit-ready"; this means that the borrower has a clear credit record.
Keeping a "Clean" Credit Record
The following are guidelines which lenders use to determine whether a prospective borrower has a good or a bad credit record.
- a continuous pattern of prompt payments
- all accounts are current with no serious delinquencies in the recent past
- no outstanding negative items of public record, such as loan defaults, legal attachment to property
- Late payments (bills paid 60-90 days after they're due)
- slow payments (bills paid consistently but always after the due date)
- accounts with current or recent delinquency
- bankruptcy, judgment, suit, lien or garnishment
- collection action, account closed for non-payment, accounts charged off, repossession, foreclosure, or governmental claim
- defaulted payments (when you simply stop paying on a loan)
If a student cannot obtain a loan because of negative credit rating, University funds cannot be awarded to replace that loan. Students who have any doubt as to their credit rating should request a copy of their own credit report and reconcile any problems now, prior to the loan application process.
Obtaining a Copy of Your Credit Report
To request a copy of your credit report: send a written and signed request, including your full name and address for the past five years, social security number, date of birth, a bill with your name and address on it, a copy of your driver's license number and daytime telephone number. If you have been denied credit within the past 30 to 60 days, you may obtain a credit report free of charge. There are four main credit reporting agencies:
CBA Credit Report
TRW Complimentary Report
CSC Credit Services
"Fixing" Your Credit Report
Any credit troubles are highlighted on your report by either an asterisk or a box. They're considered "derogatory remarks" for which most lenders will demand explanations before they grant credit.
Repairing a credit report usually requires a written explanation about why a particular account wasn't paid or was paid late. If you don't have any legitimate excuses, you will have to establish a track record of 12 to 24 months of timely payments.
The purpose of a consumer credit report is to report your credit history and whether or not you repay loans on time for the things you buy (including your education). Corrections to your credit report should be made not only with the credit bureau but also with the creditor (the store or bank which extended the credit and reported the information to the credit bureau).
Credit bureaus can put a consumer's comments on a credit report, e.g. that something is being is contested. If there is an error on your credit report which you are unable to correct with the creditor, you can contact the Better Business Bureau or the State Attorney General.
Tips to living on a student budget
- Buy no name products
- Buy bulk products and split with roommates/friends
- Buy a Penn “Meal Plan” to limit spending
- Organize potluck meals instead of eating out
- If you have to eat out go for lunch or dessert instead of supper to save money.
- Bring your lunch to school
- Never buy groceries when you are hungry
- Make a list and stick to it. Buy food for a week at a time
- Use coupons but only for items on your list
- Go for a walk/bike/rollerblade through the city trails
- Read magazines and rent movies at the library
- See the Student Association for free movie night info
- Have a picnic at the park
- Go to a matinee instead of a late night movie
- Rediscover board games
Cut your monthly spending
- Avoid credit cards and buy-now-pay-later consumer credit
- Buy used textbooks
- Wait for items to go on sale and shop off-season for deals
- Take public transportation
- Ride your bike/walk whenever possible (not alone at night)
- Check out garage sales for household items
Words of Wisdom
- Live within your budget
- Resist spontaneous spending
- Remember… If you live like a doctor while you’re a student; you’ll live like a student when you’re a doctor.
Page Updated: 08-Nov-2012