Papa John’s Pizza gave out free pizzas a couple of weeks ago to University students. All students had to do was trek out to the pizzeria on Huron Street, show their MCards and then sign up for a credit card with the woman sitting at a discrete table in the corner of the store.
The deal wasn’t quite what students expected after reading fliers scattered around campus, which didn’t mention credit cards. But several students applied for cards anyway. They’d made it out to Huron Street. They wanted their pizza.
What the new cardholders didn’t realize was while they opened the accounts for free, it’s likely their credit scores paid the cost.
The credit industry is full of unexpected snares that lower credit scores, but for college students whose credit histories have barely begun, hits to their scores do more than tarnish their financial reputations. Enough credit missteps could even put a recent graduate’s career on the line.
Sanyika Calloway, now a financial adviser, said her original career aspirations were ruined because of the credit hole she dug herself into during college.
After graduating early from Norfolk State University with a high grade point average, Calloway had the qualifications to land interviews for several communications jobs in New York City, but she couldn’t get her foot in the door. Midway into another rejection, she found out that her stained credit history was the reason why.
More than 60 percent of employers look at applicants’ credit reports when evaluating their employability, Calloway said, and it can make the difference between an offer and a rejection.
She said students make the mistake of thinking that little slip-ups now won’t affect their post-graduate lives. But the years after college are the ones in which people gain financial independence from their parents and set their sights on a nicer apartment, a mortgage and a car. A bad credit score makes reaching these fiscal milestones a lot harder.
Small smudges on your credit record will disappear eventually – in seven years. But that’s only if all debt has been paid. After you’re late on a payment, those seven years to redemption start counting from the last interest charge.
Gerri Detweiler, author of several books on personal finance, said college students are a main source of new revenue for credit card companies because they’re fresh meat in the financial world.
“Most adults already have a wallet full of cards,” she said. “College students are fresh new prospects every year.”
Detweiler said companies take advantage of students’ financial naivet