{"id":271,"date":"2016-02-12T00:48:19","date_gmt":"2016-02-12T00:48:19","guid":{"rendered":"https:\/\/courses.candelalearning.com\/lumencollegesuccess\/?post_type=chapter&#038;p=271"},"modified":"2016-09-23T17:08:47","modified_gmt":"2016-09-23T17:08:47","slug":"credit","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/chapter\/credit\/","title":{"raw":"Credit","rendered":"Credit"},"content":{"raw":"<p class=\"p1\"><a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/04\/20175227\/22854356310_47e000fa59_b.jpg\" rel=\"attachment wp-att-1065\"><img class=\"wp-image-1065 aligncenter\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/04\/20175227\/22854356310_47e000fa59_b-1024x681.jpg\" alt=\"22854356310_47e000fa59_b\" width=\"701\" height=\"466\" \/><\/a><\/p>\r\n\r\n<blockquote>\r\n<p class=\"p1\"><span class=\"s1\">Procrastination is like a credit card: it's a lot of fun until you get the bill. \u2014<\/span><span class=\"s1\">Christopher Parker, actor<\/span><\/p>\r\n<\/blockquote>\r\n<div class=\"textbox learning-objectives\">\r\n<h3>Learning Objectives<\/h3>\r\nBy the end of this section, you will be able to:\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Identify\u00a0credit card opportunities available to\u00a0college students<\/li>\r\n \t<li style=\"font-weight: 400;\">Describe\u00a0the risks and rewards of credit<\/li>\r\n \t<li style=\"font-weight: 400;\">Define credit history, and explain\u00a0how to obtain your credit report<\/li>\r\n \t<li style=\"font-weight: 400;\">Identify resources for assistance with credit issues<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h2>Credit Card Opportunities<\/h2>\r\nFor many college students, who may\u00a0not have a lot of money or even a job at all, owning a credit card may seem out of reach. Without money in an account and assurance that you can pay your monthly credit\u00a0bill, the average student\u00a0may not\u00a0seem very \"credit-worthy.\" Still, it can be important to build a credit history for certain opportunities down the road (such as getting\u00a0a loan to buy a house). You may be surprised to learn that there are plenty of companies that offer special options for younger customers, especially students. The following are some offers to look for:\r\n<ul>\r\n \t<li style=\"font-weight: 400;\"><strong>Error forgiveness<\/strong>: Since\u00a0you\u00a0may be new to the\u00a0responsibility of owning\u00a0a credit card, it\u2019s good to look for plans with error forgiveness. This may\u00a0include a 0 percent annual percentage rate (APR) for the first six months of a contract or waive\u00a0user penalties if you miss or have\u00a0a late monthly payment for the first time.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>No extra fees<\/strong>: Along with 0 percent APRs for the first six months, some credit cards don\u2019t charge students for using their cards in other countries. This is a nice\u00a0feature for students interested in studying or traveling abroad.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Rewards for good grades<\/strong>: Some companies offer credit card agreements that reward students for excelling academically. For example, you may\u00a0receive cash back every\u00a0year if you\u00a0maintain a certain grade-point average.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Effective customer service<\/strong>: Credit card companies that have positive customer service reviews often provide extra support in answering questions from\u00a0new customers. Some companies also have tools for their customers\u2019 online accounts that help them pinpoint their spending and payment habits.[footnote]Gardon, Michael. \"Best Credit Cards for Students in 2016.\" <em>The Simple Dollar<\/em>. 10 Feb 2016. Web 12 Feb 2016.[\/footnote]<\/li>\r\n<\/ul>\r\n<div class=\"textbox exercises\">\r\n<h3>Activity: Credit Cards for College Students<\/h3>\r\n<h4>Objectives<\/h4>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Examine credit card opportunities available to\u00a0college students<\/li>\r\n \t<li style=\"font-weight: 400;\">Explain the risks and rewards of credit<\/li>\r\n<\/ul>\r\n<h4>Directions<\/h4>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Research credit cards that reference college students.<\/li>\r\n \t<li style=\"font-weight: 400;\">Choose one credit card that you think offers\u00a0good benefits for college students.<\/li>\r\n \t<li style=\"font-weight: 400;\">Identify three reasons this might be a good credit card for students.<\/li>\r\n \t<li style=\"font-weight: 400;\">What are some issues\u00a0you think college students should still be aware of regarding\u00a0this credit card or credit cards in general?<\/li>\r\n \t<li style=\"font-weight: 400;\">What is the APR for this credit card? Why would this information be important for cardholders to know about?<\/li>\r\n \t<li style=\"font-weight: 400;\">Follow your instructor\u2019s guidelines for submitting this assignment.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h2>Risks and Rewards\u00a0of Credit<\/h2>\r\nCredit cards can give students new opportunities, but owning\u00a0them is also a big responsibility. Students should consider the advantages\u00a0and disadvantages of credit before choosing the best plan.\r\n<h3>Pros<\/h3>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\"><strong>Saving money<\/strong>: Credit cards can be\u00a0connected to checking accounts so that companies know where their customers\u2019 money is\u00a0coming from and they have an account to charge interest rates to. The account can help students practice saving money rather than needing to having a lot of cash on hand. This can\u00a0make it easier for students to make large payments for things like tuition and unexpected expenses\u00a0like vehicle maintenance or medical bills.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Receiving benefits<\/strong>: In addition to cash back for good grades, credit card companies may offer other benefits such as store discounts, gas rewards, and points toward air travel.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Building credit<\/strong>: If you pay off your monthly credit card every month on time, you will start building credit and have a good credit score early on. Your credit score can be an important factor later on if you decide to open another account or take out a loan. Some employers may even want to see your credit history.<\/li>\r\n<\/ul>\r\n<h3>Cons<\/h3>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\"><strong>Overspending<\/strong>: If something is out of sight, it may\u00a0be out of mind, and the same can be true of money.\u00a0Sometimes people overspend with credit cards because it\u2019s easy to think that you have more money than you really do.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Interest<\/strong>: Credit card companies with student deals still typically include some level\u00a0of APR or interest rate. If you don't pay off the entire balance every month, using a credit card can be expensive. Suppose you\u00a0decide to use your\u00a0credit card to pay for\u00a0$1,000 in school supplies and books. Credit card 1 has an APR of 10 percent, and credit card 2 has an APR of 24 percent. If it takes you a year to pay off the\u00a0$1,000, you'd actually\u00a0pay\u00a0a total of $1,055.04 with\u00a0credit card 1 and $1,134.72 with\u00a0Credit Card 2\u2014that's $55 or $135 on top of the original $1,000 you charged. This example highlights the importance of making sure you pay off the balance as soon as possible AND choose a credit card with\u00a0a lower interest rate.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Debt<\/strong>: Unlike debit cards, credit cards allow users to borrow money that they can\u00a0pay back at a later date. While this can be useful in emergency situations, you may end up charging more than you can afford to pay back right way, and you may find yourself saddled with debt. Carrying a lot of debt can damage your credit history and score.<\/li>\r\n<\/ul>\r\n<h2>Credit History and Credit Reports<\/h2>\r\nYou begin to establish a credit history as soon as you get your first credit card or get a loan.\u00a0Your credit history includes information about the number of\u00a0credit cards and loans you have and how conscientious\u00a0you are about paying your bills. Three companies, TransUnion, Equifax, and Experian, collect this information and use it to create\u00a0a credit report, which functions\u00a0as a summary of your credit history. By law, you\u2019re entitled to one free credit report each year from <a href=\"https:\/\/www.annualcreditreport.com\/index.action\">Annual Credit Report<\/a>. Although you have to pay extra for your credit score to be included with your credit report, a lot of people use this as a quick reference to gauge how good or bad someone\u2019s credit is. Different companies use slightly different ratings, but 300 or so is considered to be a low credit score,\u00a0and\u00a0700\u2013850 is considered to be high.\r\n\r\nIt's a good idea to sign up for a\u00a0free credit report\u00a0from the <a href=\"https:\/\/www.annualcreditreport.com\/index.action\">Annual Credit Report<\/a>, since other companies will charge to give you\u00a0your credit history and score. The best thing is to keep track of your bills and pay them in a timely manner so you don\u2019t have to worry about whether your credit is good or not. Potential landlords, banks, loan companies, car dealers, and even employers will often ask for your name and social security number so that they can obtain your credit information. Every business is different, but many use credit scores to evaluate prospective\u00a0customers and decide\u00a0how responsible or risky they might be.\r\n\r\nThe following video shows how\u00a0your credit score is determined and some rules of the road for improving your current credit rating.\r\n\r\nhttps:\/\/youtu.be\/EV-fF_tQDXg\r\n<h2>Resources for Credit Issues<\/h2>\r\nMaintaining credit is a big responsibility, and sometimes it can be challenging. For example, you might\u00a0have to borrow more student loans than you want\u00a0because you don't\u00a0have time to work while attending school, or it might be difficult to find a decent-paying job as a student or recent graduate. These are just a\u00a0couple\u00a0of issues that could\u00a0threaten your credit. Repairing bad credit can take a long time\u2014up to seven years\u2014so it's important to take action as soon as you're having trouble paying bills or overspending. Different resources and options are available to help you deal with credit issues, including the following:\r\n<ul>\r\n \t<li style=\"font-weight: 400;\"><strong>Loan consolidation<\/strong>: Students may\u00a0consider having multiple loans consolidated with the federal government so they have to make only one loan payment per month. While this may\u00a0give you\u00a0more time pay off\u00a0student loan debt, it may\u00a0not be the best option, since the one monthly payment can cost more and accrue a higher interest rate. Students should talk to loan company representatives and financial aid resources at their institution to discuss other payment options, such as\u00a0income-based payments in which the amount you pay each month is based on your income level.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Credit counselors<\/strong>: Credit counselors are trained to help people develop personal budgets and to provide classes on savings and debt solutions. They may\u00a0also offer debt management plans in which they\u00a0work with\u00a0your credit card and loan companies to arrange a deal and ask you for monthly deposits so that they can help you pay off your debts. If you are interested in a consultation from a credit counselor, you should ask family, friends, or your local government for references for reputable ones. You will also want to find counselors that do not charge customers too much for their services to avoid additional\u00a0debt.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Debt settlement plans<\/strong>: Debt collection companies will offer services to their clients that involve talking to credit card and loan companies and coming up with a plan to pay a lump sum instead of the total debt owed. Similar to finding credit counselors, you should contact local government offices to find reputable debt collection companies so you can avoid overpayments and scams.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>Bankruptcy<\/strong>: Bankruptcy is an official status that is obtained\u00a0through\u00a0court procedures, and it means that means you\u00a0are unable to pay off your\u00a0debts. People may\u00a0file for Chapter 13 bankruptcy, which means they don't lose any assets and have a payment plan of three\u2013five years to pay off\u00a0their debts, or Chapter 7 bankruptcy, which means they may\u00a0have to surrender assets that can be used to pay off their debts. Bankruptcy damages\u00a0your credit score, and the fees for filing paperwork and hiring an attorney can be costly, so it is important to consider other financial solutions first.<\/li>\r\n<\/ul>\r\n[caption id=\"attachment_274\" align=\"aligncenter\" width=\"500\"]<a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/02\/02025004\/3238419417_e2b3a0e050_z.jpg\" rel=\"attachment wp-att-274\"><img class=\" wp-image-274\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/02\/02025004\/3238419417_e2b3a0e050_z.jpg\" alt=\"Photo of a woman at a lectern standing in front of a classroom of adults\" width=\"500\" height=\"375\" \/><\/a> Credit counselors may\u00a0be able to recommend budgeting and credit courses that will give you tips for managing your personal finances[\/caption]\r\n\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/879","rendered":"<p class=\"p1\"><a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/04\/20175227\/22854356310_47e000fa59_b.jpg\" rel=\"attachment wp-att-1065\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-1065 aligncenter\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/04\/20175227\/22854356310_47e000fa59_b-1024x681.jpg\" alt=\"22854356310_47e000fa59_b\" width=\"701\" height=\"466\" \/><\/a><\/p>\n<blockquote>\n<p class=\"p1\"><span class=\"s1\">Procrastination is like a credit card: it&#8217;s a lot of fun until you get the bill. \u2014<\/span><span class=\"s1\">Christopher Parker, actor<\/span><\/p>\n<\/blockquote>\n<div class=\"textbox learning-objectives\">\n<h3>Learning Objectives<\/h3>\n<p>By the end of this section, you will be able to:<\/p>\n<ul>\n<li style=\"font-weight: 400;\">Identify\u00a0credit card opportunities available to\u00a0college students<\/li>\n<li style=\"font-weight: 400;\">Describe\u00a0the risks and rewards of credit<\/li>\n<li style=\"font-weight: 400;\">Define credit history, and explain\u00a0how to obtain your credit report<\/li>\n<li style=\"font-weight: 400;\">Identify resources for assistance with credit issues<\/li>\n<\/ul>\n<\/div>\n<h2>Credit Card Opportunities<\/h2>\n<p>For many college students, who may\u00a0not have a lot of money or even a job at all, owning a credit card may seem out of reach. Without money in an account and assurance that you can pay your monthly credit\u00a0bill, the average student\u00a0may not\u00a0seem very &#8220;credit-worthy.&#8221; Still, it can be important to build a credit history for certain opportunities down the road (such as getting\u00a0a loan to buy a house). You may be surprised to learn that there are plenty of companies that offer special options for younger customers, especially students. The following are some offers to look for:<\/p>\n<ul>\n<li style=\"font-weight: 400;\"><strong>Error forgiveness<\/strong>: Since\u00a0you\u00a0may be new to the\u00a0responsibility of owning\u00a0a credit card, it\u2019s good to look for plans with error forgiveness. This may\u00a0include a 0 percent annual percentage rate (APR) for the first six months of a contract or waive\u00a0user penalties if you miss or have\u00a0a late monthly payment for the first time.<\/li>\n<li style=\"font-weight: 400;\"><strong>No extra fees<\/strong>: Along with 0 percent APRs for the first six months, some credit cards don\u2019t charge students for using their cards in other countries. This is a nice\u00a0feature for students interested in studying or traveling abroad.<\/li>\n<li style=\"font-weight: 400;\"><strong>Rewards for good grades<\/strong>: Some companies offer credit card agreements that reward students for excelling academically. For example, you may\u00a0receive cash back every\u00a0year if you\u00a0maintain a certain grade-point average.<\/li>\n<li style=\"font-weight: 400;\"><strong>Effective customer service<\/strong>: Credit card companies that have positive customer service reviews often provide extra support in answering questions from\u00a0new customers. Some companies also have tools for their customers\u2019 online accounts that help them pinpoint their spending and payment habits.<a class=\"footnote\" title=\"Gardon, Michael. &quot;Best Credit Cards for Students in 2016.&quot; The Simple Dollar. 10 Feb 2016. Web 12 Feb 2016.\" id=\"return-footnote-271-1\" href=\"#footnote-271-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/li>\n<\/ul>\n<div class=\"textbox exercises\">\n<h3>Activity: Credit Cards for College Students<\/h3>\n<h4>Objectives<\/h4>\n<ul>\n<li style=\"font-weight: 400;\">Examine credit card opportunities available to\u00a0college students<\/li>\n<li style=\"font-weight: 400;\">Explain the risks and rewards of credit<\/li>\n<\/ul>\n<h4>Directions<\/h4>\n<ul>\n<li style=\"font-weight: 400;\">Research credit cards that reference college students.<\/li>\n<li style=\"font-weight: 400;\">Choose one credit card that you think offers\u00a0good benefits for college students.<\/li>\n<li style=\"font-weight: 400;\">Identify three reasons this might be a good credit card for students.<\/li>\n<li style=\"font-weight: 400;\">What are some issues\u00a0you think college students should still be aware of regarding\u00a0this credit card or credit cards in general?<\/li>\n<li style=\"font-weight: 400;\">What is the APR for this credit card? Why would this information be important for cardholders to know about?<\/li>\n<li style=\"font-weight: 400;\">Follow your instructor\u2019s guidelines for submitting this assignment.<\/li>\n<\/ul>\n<\/div>\n<h2>Risks and Rewards\u00a0of Credit<\/h2>\n<p>Credit cards can give students new opportunities, but owning\u00a0them is also a big responsibility. Students should consider the advantages\u00a0and disadvantages of credit before choosing the best plan.<\/p>\n<h3>Pros<\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><strong>Saving money<\/strong>: Credit cards can be\u00a0connected to checking accounts so that companies know where their customers\u2019 money is\u00a0coming from and they have an account to charge interest rates to. The account can help students practice saving money rather than needing to having a lot of cash on hand. This can\u00a0make it easier for students to make large payments for things like tuition and unexpected expenses\u00a0like vehicle maintenance or medical bills.<\/li>\n<li style=\"font-weight: 400;\"><strong>Receiving benefits<\/strong>: In addition to cash back for good grades, credit card companies may offer other benefits such as store discounts, gas rewards, and points toward air travel.<\/li>\n<li style=\"font-weight: 400;\"><strong>Building credit<\/strong>: If you pay off your monthly credit card every month on time, you will start building credit and have a good credit score early on. Your credit score can be an important factor later on if you decide to open another account or take out a loan. Some employers may even want to see your credit history.<\/li>\n<\/ul>\n<h3>Cons<\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><strong>Overspending<\/strong>: If something is out of sight, it may\u00a0be out of mind, and the same can be true of money.\u00a0Sometimes people overspend with credit cards because it\u2019s easy to think that you have more money than you really do.<\/li>\n<li style=\"font-weight: 400;\"><strong>Interest<\/strong>: Credit card companies with student deals still typically include some level\u00a0of APR or interest rate. If you don&#8217;t pay off the entire balance every month, using a credit card can be expensive. Suppose you\u00a0decide to use your\u00a0credit card to pay for\u00a0$1,000 in school supplies and books. Credit card 1 has an APR of 10 percent, and credit card 2 has an APR of 24 percent. If it takes you a year to pay off the\u00a0$1,000, you&#8217;d actually\u00a0pay\u00a0a total of $1,055.04 with\u00a0credit card 1 and $1,134.72 with\u00a0Credit Card 2\u2014that&#8217;s $55 or $135 on top of the original $1,000 you charged. This example highlights the importance of making sure you pay off the balance as soon as possible AND choose a credit card with\u00a0a lower interest rate.<\/li>\n<li style=\"font-weight: 400;\"><strong>Debt<\/strong>: Unlike debit cards, credit cards allow users to borrow money that they can\u00a0pay back at a later date. While this can be useful in emergency situations, you may end up charging more than you can afford to pay back right way, and you may find yourself saddled with debt. Carrying a lot of debt can damage your credit history and score.<\/li>\n<\/ul>\n<h2>Credit History and Credit Reports<\/h2>\n<p>You begin to establish a credit history as soon as you get your first credit card or get a loan.\u00a0Your credit history includes information about the number of\u00a0credit cards and loans you have and how conscientious\u00a0you are about paying your bills. Three companies, TransUnion, Equifax, and Experian, collect this information and use it to create\u00a0a credit report, which functions\u00a0as a summary of your credit history. By law, you\u2019re entitled to one free credit report each year from <a href=\"https:\/\/www.annualcreditreport.com\/index.action\">Annual Credit Report<\/a>. Although you have to pay extra for your credit score to be included with your credit report, a lot of people use this as a quick reference to gauge how good or bad someone\u2019s credit is. Different companies use slightly different ratings, but 300 or so is considered to be a low credit score,\u00a0and\u00a0700\u2013850 is considered to be high.<\/p>\n<p>It&#8217;s a good idea to sign up for a\u00a0free credit report\u00a0from the <a href=\"https:\/\/www.annualcreditreport.com\/index.action\">Annual Credit Report<\/a>, since other companies will charge to give you\u00a0your credit history and score. The best thing is to keep track of your bills and pay them in a timely manner so you don\u2019t have to worry about whether your credit is good or not. Potential landlords, banks, loan companies, car dealers, and even employers will often ask for your name and social security number so that they can obtain your credit information. Every business is different, but many use credit scores to evaluate prospective\u00a0customers and decide\u00a0how responsible or risky they might be.<\/p>\n<p>The following video shows how\u00a0your credit score is determined and some rules of the road for improving your current credit rating.<\/p>\n<p><iframe loading=\"lazy\" id=\"oembed-1\" title=\"How to Build a Good Credit Score\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/EV-fF_tQDXg?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>Resources for Credit Issues<\/h2>\n<p>Maintaining credit is a big responsibility, and sometimes it can be challenging. For example, you might\u00a0have to borrow more student loans than you want\u00a0because you don&#8217;t\u00a0have time to work while attending school, or it might be difficult to find a decent-paying job as a student or recent graduate. These are just a\u00a0couple\u00a0of issues that could\u00a0threaten your credit. Repairing bad credit can take a long time\u2014up to seven years\u2014so it&#8217;s important to take action as soon as you&#8217;re having trouble paying bills or overspending. Different resources and options are available to help you deal with credit issues, including the following:<\/p>\n<ul>\n<li style=\"font-weight: 400;\"><strong>Loan consolidation<\/strong>: Students may\u00a0consider having multiple loans consolidated with the federal government so they have to make only one loan payment per month. While this may\u00a0give you\u00a0more time pay off\u00a0student loan debt, it may\u00a0not be the best option, since the one monthly payment can cost more and accrue a higher interest rate. Students should talk to loan company representatives and financial aid resources at their institution to discuss other payment options, such as\u00a0income-based payments in which the amount you pay each month is based on your income level.<\/li>\n<li style=\"font-weight: 400;\"><strong>Credit counselors<\/strong>: Credit counselors are trained to help people develop personal budgets and to provide classes on savings and debt solutions. They may\u00a0also offer debt management plans in which they\u00a0work with\u00a0your credit card and loan companies to arrange a deal and ask you for monthly deposits so that they can help you pay off your debts. If you are interested in a consultation from a credit counselor, you should ask family, friends, or your local government for references for reputable ones. You will also want to find counselors that do not charge customers too much for their services to avoid additional\u00a0debt.<\/li>\n<li style=\"font-weight: 400;\"><strong>Debt settlement plans<\/strong>: Debt collection companies will offer services to their clients that involve talking to credit card and loan companies and coming up with a plan to pay a lump sum instead of the total debt owed. Similar to finding credit counselors, you should contact local government offices to find reputable debt collection companies so you can avoid overpayments and scams.<\/li>\n<li style=\"font-weight: 400;\"><strong>Bankruptcy<\/strong>: Bankruptcy is an official status that is obtained\u00a0through\u00a0court procedures, and it means that means you\u00a0are unable to pay off your\u00a0debts. People may\u00a0file for Chapter 13 bankruptcy, which means they don&#8217;t lose any assets and have a payment plan of three\u2013five years to pay off\u00a0their debts, or Chapter 7 bankruptcy, which means they may\u00a0have to surrender assets that can be used to pay off their debts. Bankruptcy damages\u00a0your credit score, and the fees for filing paperwork and hiring an attorney can be costly, so it is important to consider other financial solutions first.<\/li>\n<\/ul>\n<div id=\"attachment_274\" style=\"width: 510px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/02\/02025004\/3238419417_e2b3a0e050_z.jpg\" rel=\"attachment wp-att-274\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-274\" class=\"wp-image-274\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/02\/02025004\/3238419417_e2b3a0e050_z.jpg\" alt=\"Photo of a woman at a lectern standing in front of a classroom of adults\" width=\"500\" height=\"375\" \/><\/a><\/p>\n<p id=\"caption-attachment-274\" class=\"wp-caption-text\">Credit counselors may\u00a0be able to recommend budgeting and credit courses that will give you tips for managing your personal finances<\/p>\n<\/div>\n<p>\t<iframe id=\"lumen_assessment_879\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=879&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_879\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-271\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Credit. <strong>Authored by<\/strong>: Jolene Carr. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Student Credit Card Offers. <strong>Authored by<\/strong>: Find a Future. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.flickr.com\/photos\/findafuture\/22854356310\/sizes\/l\">https:\/\/www.flickr.com\/photos\/findafuture\/22854356310\/sizes\/l<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Image of credit counseling session. <strong>Authored by<\/strong>: Phil Sexton. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/flic.kr\/p\/5WaKgx\">https:\/\/flic.kr\/p\/5WaKgx<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">All rights reserved content<\/div><ul class=\"citation-list\"><li>How to Build a Good Credit Score. <strong>Authored by<\/strong>: Young Indiana. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/youtu.be\/EV-fF_tQDXg\">https:\/\/youtu.be\/EV-fF_tQDXg<\/a>. <strong>License<\/strong>: <em>All Rights Reserved<\/em>. <strong>License Terms<\/strong>: Standard YouTube License<\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">Public domain content<\/div><ul class=\"citation-list\"><li>Your Credit History. <strong>Provided by<\/strong>: Federal Trade Commission. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.consumer.gov\/articles\/1009-your-credit-history#!what-to-know\">https:\/\/www.consumer.gov\/articles\/1009-your-credit-history#!what-to-know<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/pdm\">Public Domain: No Known Copyright<\/a><\/em><\/li><li>Consolidating Student Loans. <strong>Provided by<\/strong>: US Department of Education. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/studentaid.ed.gov\/sa\/repay-loans\/consolidation\">https:\/\/studentaid.ed.gov\/sa\/repay-loans\/consolidation<\/a>. <strong>Project<\/strong>: Federal Student Aid. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/pdm\">Public Domain: No Known Copyright<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-271-1\">Gardon, Michael. \"Best Credit Cards for Students in 2016.\" <em>The Simple Dollar<\/em>. 10 Feb 2016. Web 12 Feb 2016. <a href=\"#return-footnote-271-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":277,"menu_order":6,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Student Credit Card Offers\",\"author\":\"Find a Future\",\"organization\":\"\",\"url\":\"https:\/\/www.flickr.com\/photos\/findafuture\/22854356310\/sizes\/l\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"pd\",\"description\":\"Your Credit History\",\"author\":\"\",\"organization\":\"Federal Trade Commission\",\"url\":\"https:\/\/www.consumer.gov\/articles\/1009-your-credit-history#!what-to-know\",\"project\":\"\",\"license\":\"pd\",\"license_terms\":\"\"},{\"type\":\"copyrighted_video\",\"description\":\"How to Build a Good Credit Score\",\"author\":\"Young Indiana\",\"organization\":\"\",\"url\":\"https:\/\/youtu.be\/EV-fF_tQDXg\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Standard YouTube License\"},{\"type\":\"cc\",\"description\":\"Image of credit counseling session\",\"author\":\"Phil Sexton\",\"organization\":\"\",\"url\":\"https:\/\/flic.kr\/p\/5WaKgx\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Credit\",\"author\":\"Jolene Carr\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"pd\",\"description\":\"Consolidating Student Loans\",\"author\":\"\",\"organization\":\"US Department of Education\",\"url\":\"https:\/\/studentaid.ed.gov\/sa\/repay-loans\/consolidation\",\"project\":\"Federal Student Aid\",\"license\":\"pd\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-271","chapter","type-chapter","status-publish","hentry"],"part":135,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/pressbooks\/v2\/chapters\/271","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/wp\/v2\/users\/277"}],"version-history":[{"count":9,"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/pressbooks\/v2\/chapters\/271\/revisions"}],"predecessor-version":[{"id":1263,"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/pressbooks\/v2\/chapters\/271\/revisions\/1263"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/pressbooks\/v2\/parts\/135"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/pressbooks\/v2\/chapters\/271\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/wp\/v2\/media?parent=271"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/pressbooks\/v2\/chapter-type?post=271"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/wp\/v2\/contributor?post=271"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/nvrcte-sandbox-collegesuccess\/wp-json\/wp\/v2\/license?post=271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}