Credit Management for Young Adults

Credit Management for Young Adults

Most people with children want to ensure that they receive the best education possible. Thousands of dollars are shelled out every year to send young adults to private learning institutions as well as colleges, universities and technical education schools. With all this education under their belts, why is it that many young adults will end up having a low credit ranking? For our children to be successful in life, it is the responsibility of adults today to ensure that future adults of tomorrow receive the best education possible. That education needs to include credit management so the world’s children do not find themselves forced into bankruptcy later in life because of poor decisions made when they were young. 
Many people do not realize what a credit score is or what it means to each individual. A credit score, or more commonly known as a FICO score,  is an average numbering system created by the Fair Isaac Corporation, that can be anywhere between 300 and 850, 300 being the lowest and 850 being the highest.   The Fair Isaac Corporation, which was founded in 1956 by Bill Fair and Earl Issac, is a company that provides consulting services to many businesses throughout the world including 99 out of the 100 top banks in America as well as 49 out of the top 50 banks globally (Wikipedia, 2007).   The score is calculated off an average of one’s current as well as past credit history as reported by lenders, such as retail corporations who extend credit or mortgage companies who lend money towards the purchase of a home or business office. This information is compiled into a report known as a person’s credit report. A credit report is reviewed by the three major credit bureaus, Equifax, Experian and Trans-union. It is these companies which issue a FICO score for each report (Salt Lake Tribune, 2007).  Credit scores are used to determine interest rates a person will receive from purchasing a home to buying a car. There are even some insurance companies who use a credit...