Helpful Financial Information
Finding the right repayment plan to successfully pay off your student loan(s) is a big decision. With all the technical language used, even understanding the terms of your loan can lead to confusion. GCU's Financial Literacy Program is here to offer you support from the time you graduate through the life of the loan.
TG™ Learning Center
GCU has partnered with TGTM Texas Guaranteed Student Loan Corporation where you can create an account and complete financial literacy modules including:
Setting Goals, Credit Basics and Monitoring Spending.
Cick here to learn more
Financial Tip of the Month
Don't Ruin Your Credit Score! Avoid These 4 Follies
Legendary American investor Warren Buffet once said, "It takes 20 years to build a reputation and five minutes to ruin it." The same could be said of good credit. It isn't built overnight or by accident. Most Americans with stellar credit scores have exercised financial discipline for years. That's why lenders are willing to offer them mortgages and car loans at favorable interest rates. Like a good reputation, a strong credit score can be easily ruined. Here are four ways to devastate your credit score:
- Max out your credit cards and don't make required payments. Your credit score is a number between 300 and 850 (worst to best) that most lenders use when deciding whether to extend credit. About 35% of your credit score comes from your payment history. Paying late or paying less than required minimums can wreak havoc on your credit score and may signal to lenders that you're overextended.
- Co-sign on an irresponsible friend's loan. There's a reason why your pal needs a co-signer: he or she is perceived as a high credit risk. If your friend defaults on the loan, then you're responsible for the unpaid balance. As William Shakespeare once wrote, "Loan oft loses both itself and friend." Remember this: If you co-sign for a loan, the status of the loan will appear on your credit report.
- Close credit card accounts in quick succession. Shutting down a credit card or line of credit account may adversely affect your debt-to-utilization ratio (how much you owe in relation to your credit limits). As this ratio climbs, your credit score tends to sink. For example, you have three credit cards and each has a $1,000 limit. You carry a balance of $500 on one of those accounts. That's a debt ratio of $500 to $3,000 or about 17%. If you close one of the accounts, the ratio will jump to 25% ($500 to $2,000). Though you haven't accumulated more debt, your credit score may be hurt.
- Default on your installment loan or home mortgage. This is another surefire way to trash your credit score. A home foreclosure, for example, may cause your credit score to plunge by 200 points or more. Because most negative information stays on your credit report for seven years (10 years for a bankruptcy), lenders may be reluctant to offer you money for a very long time.
Avoid these follies to keep your credit score in tact! This will help you build long-term equity so that you can take out larger loans with favorable interest rates.
Source: J.P. Spillane, CPA, PA