As students head to college this fall, they will experience many firsts, including managing their money.
From financial aid, loan obligations and buying food and books, to opening a checking account, most college students are navigating new financial territory. And many are ill prepared for the challenge of building credit.
"A lot of kids are so worried about grades, and that's important, but your credit history follows you around a lot longer," said Peter Nigro, a professor and chair of the finance department at Bryant University.
In fact, credit reporting and scores play a big role in daily life. The process can determine the interest rates consumers are going to pay on credit cards, car loans and their mortgages — or whether they will get any loans at all.
"Credit is a good thing if you use it responsibly ," Nigro said. "It can be a disaster if you don't."
Before students step foot on campus and into potential pitfalls , financial experts advise beginning with a plan, which includes a conversation between parents and their college-bound children.
Beth Kobliner, author of "Make Your Kid a Money Genius (Even If You're Not)," recommends going over the following points well ahead of orientation:
Talk numbers. At $20,000 a year for an in-state school or $45,000 at a private university, having an open discussion about the numbers can be a great wake-up call, Kobliner said. Explain the different types of loans and how they'll be paid back. One rule of thumb: Don't borrow more in four years than your expected first-year salary after graduation.