Student Loan Debt Settlement And Your Credit

Using credit to teach students a costly lesson is the perfect method of educating young people how to save and responsibly pay off loans.Almost 80 percent of students when theygo to university will receive a loan or line of credit, and will need to know how to properly manage this money.

The reason why it is a good idea to teach students about credit cards is so the young person will realize how important it is to havea great credit score. This can be anything from buying a car, getting a student loan, renting an apartment or signing up for store cards. If a student is not given the proper education on credit cards, then very quickly a credit rating can be damaged.

Begin Teaching Early

Teaching children about credit cards,loans,and money managementcan start earlyin elementary school. The child can be given some money for the week, and told they need to budget this money to purchase lunch and other activities with friends. The student should also know that only this set amount of money is available.

In high school, the student can be taught more serious aspects of managing credit and money. The parents can go along with them to open a bank account. The student should be told that activities in a bank account such as going into overdraft will affect a credit score. Periodically the parent should review the bank account to see if his or her child is able to properly manage money. It will also be a good idea to discuss saving some of the money received. This will be a great educational lesson for the young person's future. The parent should have a discussion with the teenager when they see spending is out of control.

Dealing With Debt Settlement

The tough lesson of obtaining a student loan and managing credit should continue through college or university. The college student should be encouraged to make college loan payments on time. If the student does need to have the debt of a student loan settled, it will be a big relief to the person. A debt settlement can mean lower monthly payments with longer repayment terms. If the monthly payments are already late, the student will need the help of a debt negotiator to come to an agreement with the student loan company. This will result in a damaged credit rating, leading to difficultyin the student obtaining credit in the future.