Your credit score is not just a number. It affects everything from whether you qualify for a mortgage application to whether an employer hires you or not.

So, failing to take active measures to improve your ailing credit score can
cost you hundreds or even thousands of extra bucks on a home mortgage, auto loan, student loan, credit card interest, or an insurance bill.

Creditors and lending institutions look at your credit report to determine your score.

The score is the single largest factor that banks and other lending institutions look at when extending credit.

So, if you have a not so perfect credit score then you can bet that you’ll be charged higher fees and terrible interest rates.

Heck, even insurers use your score as a factor to determine your credit rating as an insurance risk because they too see a correlation between financial responsibility and insurance losses.

This might come to you as a surprise that credit check is not restricted to banks, lenders or insurers, employers too go for credit check before hiring an employee. It is even noticed that credit score is one of the factors that sometimes play a role in promotions as well.

Most apartment complexes run both credit as well as employment background checks before approving an application to rent an apartment. A poor score can have your application denied or you may have to pay a ridiculous amount of rent.

So, I hope this quick little post shows you just how important it is to keep that credit score on the up and up… it means a heck of a lot more than just a cool number between 500 and 850.

In the next few weeks I’ll write a post or two on building your credit while in college… the safe way.

The FAFSA is one confusing animal when you first get started in figuring out financial aid and scholarships for college.

For one, your FAFSA results can be a real pain the ass if it puts your parents contribution up
too high… but, if you get great results from your FAFSA application, it could mean that you will qualify for more scholarships from your college.

So, what is the FAFSA?

FAFSA stands for: (the definition of FAFSA)

Free Application for Federal Student Aid    (US Department of Education)

As it sounds, the FAFSA process helps determine how much federal financial aid you will be eligible for.  This could be in the form of loans, scholarships from the college, etc.

How does the FAFSA process work?

Well, the whole FAFSA process is pretty simple.

1. The application basically gathers financial information about you and your parents
2. Each school year you fill out or renew your application and update any changes to the financial situation (usually with the tax returns each year)
3. The application produces results that say how much the expected contribution should be from you/your parents based on your income and assets
4. You indicate which schools you want the FAFSA results sent to, and they are automatically sent after you complete the application each year
5. The financial aid offices at the colleges you are looking at receive the FAFSA results and the EFC (estimated financial contribution), and use that to determine your financial need for college

Really, it’s that simple.  The government needs a way to find out who the people with the most financial need are so they can provide those in more need… with more financial aid.

Are there deadlines for FAFSA?

There sure are.  This is where it got confusing for me sometimes.  Here’s the page directly on the FAFSA website to see their deadlines.

==> http://www.fafsa.ed.gov/before003a.htm

A good rule of thumb is to do the FAFSA each year at the start of January to ensure that your application is in to the college in enough time to enable you to qualify for certain scholarships and financial aid.

So, write on your calendar for the next 4 years to do the FAFSA each January.

Do I need to fill out the FAFSA?

Unless you don’t plan on applying for any financial aid at all… you should complete the FAFSA.

Once again, the FAFSA is for federal student financial aid.  If you don’t intend to use an federal financial aid, don’t do the FAFSA.  This includes:

• Scholarships
• Student Loans
• College Work-Study
• Pell Grants
• Other Government Grants

If you have any intentions or desires at all to get any government grants, scholarships, etc. DO THE FAFSA.

How long does the FAFSA take?

The FAFSA is really pretty simple after you do it for the first time.  I would say that the first time I did the FAFSA it took a good 30 – 60 minutes to complete it.

The FAFSA website does allow you to save your application so you can come back to it, so don’t pull your hair out thinking you have to get it done in one sitting.  Your first time will be more to get the feel for the type of information they are asking for.  Then, you’ll save your application, gather the information, and come back later to finish it.

After the first year, all you have to do is renew your FAFSA application.  The first time you submit your FAFSA, you are given a PIN code (write this down and don’t lose it… you’ll need it every year!).  With this pin code and your password, you just log in to renew, update any information that has changed, and submit it.

Easy as that.

What documents do you need for the FAFSA application?

There is a whole list of documents needed for the FAFSA.  Here they are:

• Social security number
• Drivers license
• W-2 forms for you and your parents (or other guardian)
• Federal income tax returns for the year before for you and your parents
• Your untaxed income records
  • Social Security
  • Temporary Assistance for Needy Families
  • Welfare
  • Veterans benefits records
• Your current bank statements
• Investment records, mortgage information, etc.

… and that’s about it.

Just gather up these documents and have them with you at the computer when you are filling out the FAFSA.

Where do I get FAFSA financial aid?

A lot of new students think FAFSA is the actual entity that sends you the money.  This is wrong.

FAFSA is just the application to determine your financial aid.  This application and the results are sent out to the colleges you apply to… the financial aid ends up coming through the college financial aid office.

How do I get started with the FAFSA and the FAFSA forms?

Head on over to the FAFSA website at:

• www.fafsa.ed.gov

There are pretty darn good directions there to follow.  If you have any questions shoot them my way!

Also, be sure to search for scholarships online too.  My favorites are:

• Fastweb   (this is my favorite.  I got the $4,000 scholarship from this site)
• FreeCollegeScholarships.net (great site too… have some scholarships Fastweb doesn’t have.