I applaud your effort to teach the students of FAMU about how important it is to use credit wisely. But you advised students to get rid of the credit cards if they find themselves living beyond their means. This is actually not good advice. When you close down a credit card account you also erase all of the credit history tied to that card. The length of your credit history has an impact on your score. Also your debt to credit available ratio is 30% of your score. So closing down a credit card adversly affects that portion of your credit score. Conversly, getting a hire limit reduces the percentage of debt to credit available, so it helps your score. That is if you use credit responsibly.
Also, having no credit is as bad as having not so good credit. If you have no credit history upon graduating from college, you will find it hard to get an apartment, buy a house, or buy a car without a co-signer because you will have no credit history. I recommend that you read Suzie Orman’s “Young, Fabulous, and Broke.” It is a great book for young people to learn about handling their finances.
Tamieka Mays can be reached at email@example.com
Class of ’05