7 Biggest Money Mistakes College Grads Make

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czarnydrus of MT 7:04PM February 12, 2013

interesting perspective

Colin of FL 12:44PM May 25, 2012

I am a mortgage loan processor, which means I prepare files for underwriters to review for approval of loans. Let me make it clear that you DO NEED CREDIT to purchase a home. You at the least will need proof of payment on RENT, LIFE INSURANCE POLICIES, and any other item paid out over time. This is referred to as Non-Traditional Credit and is VERY difficult to get approved, but it can be done. NO ONE is going to lend money to anyone, regardless of age or income, money to purchase a mortgage in today's climate without a minimal of 6-12 months credit history. It can be a CD for $1,000 that you purchased and used as collateral on a small loan for that amount, regardless you need some proof you can pay a loan back or on a revolving account. Even people with great jobs and job security default on loans, file bankruptcy, and go into foreclosure so a college graduate or young adult should build some forms of credit. Also note they should use that credit wisely, it's as important as having it. Some mortgage investment banks will NOT accept non-traditional credit, so it's best to build some forms of credit; e.g., furniture accounts, small balance credit cards, student loan repayments, etecera).

A. Toliver of VA 11:46AM May 26, 2011

I wish what you are saying is true, Rebecca, but unfortunately it is not... it is increasingly hard, if not impossible, for young people with scant credit history to take out loans. You are right that a hefty downpayment helps, but few young people can make it all the way up to 30%! In fact, few people of any age can put down 30 percent.

Here is a more detailed story that I wrote on that subject:

http://money.usnews.com/money/blogs/alpha-consumer/2011/02/17/the-dangers-of-avoiding-credit

Kimberly Palmer of DC 11:16AM May 20, 2011

"Being responsible for credit accounts also allows 20-somethings to build their credit history, which is required if they want to take out a mortgage, auto loan, or other type of loan in the future."

This is patently untrue. It is more difficult to take out a mortgage, auto loan, or other type of loan without good credit, but that does not mean it is required. Not at all. Go to a bank with a 30% down payment for a house and a stable income and see if they turn you down. Not usually.

Rebecca of FL 9:42PM May 10, 2011

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