11.10.09 | Private Student Loans and Credit Go Hand in Hand
For many students obtaining a private student loan can be difficult. Private student loans always sound fantastic because you can apply for them at any time during your college career and they can help you pay for books and housing. However, contrary to popular belief, these loans do not just fall into the lap of every student who cries poor.
One of the major advantages of a private student loan is that they are not need based, but this comes with a trade-off. Private student loans are based on credit and if you have a bad credit history or no credit history your chances of obtaining a loan are slim. Even if you have a cosigner with a strong credit history your credit score will still be checked during the application process and could affect whether or not you get a loan.
You might be surprised to hear that the solution to this problem is a credit card. Credit cards often carry a bad reputation, but the truth is that when they are used responsibly they can help your credit score soar. My advice is to apply for a card with a low limit, use the card for a few purchases every week, and pay off the balance every month. This method with help you build your credit history and show prospective lenders you are financially responsible.
If the need for a private student loan might be in your future I encourage you to consider building your credit with a credit card. StudentPlatinum.com can help you figure out which credit card would be good for you. There are cards for people in all kinds of financial situations. Even if you already have poor credit you can apply for a card and start turning things around.
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