10—The Daily Collegian Friday, April 11, 1986 Establishing credit By PETER D. TENNY Collegian Business Writer Need to pay tuition, but that financial aid pack age didn't come through? Or want to buy that new car, but haven't got the money? Obtaining credit may be an answer. Americans are indeed living in a "buy now pay later" credit-oriented economy. Almost every thing is bought on credit, from cars to gasoline for those cars. "Even those who claim they don't use credit charge their phone and electric bills," said John R. Brunner, asssistant vice president of retail lending for United Federal Savings Bank, 116 E. Beaver Ave. "Buying on credit is a way of life." For this reason, establishing credit is essential for college students, but it can be difficult to obtain, according to lenders in the State College area. Basically, the concept of credit involves the use of other people's money in exchange for a promise to repay at a later date. The most common type of credit extended to college students from commercial banks is in the form of guaranteed student loans from the Penn sylvania Higher Education Assistance Agency. With a PHEAA loan, a college student can borrow up to $2,500 per year, for four years. A student does not begin to repay the principal and the interest does not accrue until six months after graduation. The loan has a 10-year maturity time, and the interest rate is 8 percent. Local lenders agree that college students have an excellent track record in their repayment of PHEAA loans. However, in most cases, college students do not have a proven credit history, which may make it difficult to obtain credit for the first time. Richard McMaster, vice chairman of credit for Mellon Bank, suggested that students attempt to Kicr OKI' - KKr - 41:0KT - KKI' - OICT - KKr Phi Psi, We are psyched to chug tonight Because we're having so much fun We're going to put up our best fight To let you know we're #1! KKr - OKT - KKr - CIKT - KKr - OKT - KKr Save $l5 On All 10K Gold Class Rings Too! , Owned and Operated by the Pennsylvania State University on campus Deposit Required. Master Card or Visa Accepted • C 1984 Art Carved Class Rings All This Week! your college ring; about choosing the finest—a 14K gold college ring from Ari Carved. Designed and handcrafted for lasting value, an Art Carved i4K. gold college ring is now more affordable thab ever. For a lim ited time only, you can save $2.5 on the style of your choice. Stop by to see the entire Art Carved collection and custom options. Remember, it's your year for gold! A RT A RUED® lI CLASS RINGS Tenn State 6Boolc§tore establish a good credit rating early on "If a student never borrowed before and had no credit history, he or she would have to show other examples of their financial responsibility. Credit cards such as Master Card, Visa and gasoline cards can be good sources for reference," McMas ter said. In determining whether to extend credit, lenders consider the individual's credit-worthiness, which is evaluated on the criteria of "the three C's" capacity, collateral and character, Brunner said. Capacity is determined from an individual's income and refers to the ability to pay. "The lending business is rife with risk, and all lenders look for a source of repayment," McMas ter said. "If a student does not demonstratethat he has the ability to repay, a parent's co-signing may be necessary to secure the loan." Collateral refers to assets the individual owns such as a bank account, a car, or anything that could serve as security in the event the person defaults on the loan. "Lenders do not want to repossess your car or foreclose on your house," Brunner explained. "We would rather have you as a good paying custom er." Character is evaluated by an individual's credit history. How a person has handled financial obli gations in the past is an indication of what a lender may expect in the future, Brunner said. The length of time a person lives at an address, years of employment at a current job, the rea sonableness of purpose for the loan as well as attitude, appearance, dress, demeanor, behavior, poise and composure are all aspects of a person's character which may affect whether a lender will offer credit. Under the Equal Credit Opportunity Act, which took effect in 1977, credit cannot be denied on the basis of race, color, religion, national origin, age, sex or marital status. love,The Kapp®s 0-154 an essential step 10 AM - 4 PM Brunner said married women should apply for credit under their own names, not under their husbands' names. Also, freshmen under age 18 cannot receive credit because they lack the legal capacity to enter into contract, he said. But the underlying reason for denying credit is a bad credit rating. "Your credit rating is obtained from a variety of sources including banks, finance companies, de partment stores and other creditors," said Martha Grayish, manager of First Credit Bureau of Centre County, Bellefonte, a credit bureau report ing agency that collects information on people's paying performance. Under the Truth in Lending Act, Regulation Z, and the Consumer Credit Disclosure Act, people have the right to know all the terms and conditions associated with the credit they are receiving. Under the Federal Fair Credit Reporting Act of 1971 people have the right to know their credit rating. "After an individual has developed credit, it is important to maintain it," McMaster said. "If an individual has a bad credit rating, he or she should try to improve it up by talking to the lender," McMaster recommended. "Developing credit is an insidious thing," Mc- Master said. "It is relatively easy to build up a credit reputation without even being aware of it." "Your credit history is earned; it is whatever you make it, and what you do will follow you," McMaster added. Initially establishing credit is difficult, but once a good credit rating is developed, an individual has an easier time receiving credit because lenders know the bills will be paid, Brunner said. "A good credit rating is a person's most impor tant asset," Grayish added. The sisters of Delta Delta Delta would like to congratulate their 1985-86 Delta MEN Thomas Thomas Fickinger Kramer . You're all special to, us and ••.` we're psyched i to give yoo this award! Robert Siitler Delta Love, The Sisters Tough drinking bill sent back to committee By STEVE WILSON Collegian Staff Writer One of the toughest underage drinking bills to come along in years was referred back to commit tee Tuesday in an unusual turnaround by the state Senate. The' proposal, which would make underage drinking a third degree misdemeanor and revoke offenders' driver's licenses whether or not they were driving at the time, had strong support when debate began, but after a few hours, the Senate voted 25-24 to send the bill back to the Law and Justice Committee. "It was one of those unusual instances where debate on the floor changed the vote," Senate Majority Leader John Stauffer, R-Chester, said. David Rosenblatt, Alliance of Pennsylvania Student Government chairman and the Universi ty's Undergraduate Student Government presi dent, who testified against the bill in January, said he was pleased the bill didn't pass. Student lobbyists push Harrisburg for funds By STEVE WILSON Collegian Staff Writer ' Thirty-one state representatives and senators will be hearing from University students during the next three weeks as lobbying efforts of the University Student Executive Council get underway. USEC's Harrisburg Governmental Relations Committee members, cou pled with USEC members them selves, will be in Harrisburg April 14, 16, 28, 29, and 30 pleading the Univer sity's case for more money. Undergraduate Student Govern ment President David Rosenblatt met with House Majority Leader James J. Manderino, D-Westmore land, as a representative of both GRC and the Alliance of Pennsylvania Student. Governments. "He was one of the key legislators in increasing the appropriations last year, so we were basically asking him to do the same thing this year," Rosenblatt said. GRC members have spent the last month researching University Presi dent Bryce Jordan's budget and other funding statistics and will provide the specific knowledge while USEC members will try to do the selling. The meetings are aimed primarily at members of appropriations and high er education committees but will also TRIANGLE • TRIANGLE • TRIANGLE • TRIANGLE • TRIANGLE • TRIANGLE o' The Brothers and Sisters of TRIANGLE FRATERNITY welcome their recent initiates Brian Engle George Zacherl Ned Renzi Bill Saylor Scott Romesburg Scott Schriner Dave Pelna Sharon Dove Diane Dean Tim Keeports Jim Stegeman Dan Fleming TRIANGLE • TRIANGLE • TRIANGLE • TRIANGLE • TRIANGLE • TRIANGLE target local legislators state Reps. Lynn B. Herman, R-Centre, and Ruth C. Rudy, D-Centre, and state Sen. J. Doyle Corman, R-Centre as well as some special contacts. "What we're trying to do is match USEC members and GRC members with legislators in their district," GRC-Harrisburg Chairman Larry Colorito said yesterday. USEC and GRC members are tied to about, 13 districts, but other legis lators can expect to hear from them, Colorito said. Lobbyists will be rep resenting the University and not their districts, he added, but being from that district "is an added plus." But with only six GRC members, including Colorito, the committee may have difficulty getting to all the legislators. "The people we don't get to see, because of time constraints, will be getting a letter," he added. The committee faces some added time constraints with half its mem bers dropping out earlier this semes ter. The Harrisburg lobby was originally divided into two commit tees, one each for the House and the Senate. But Dan Loney, chair Man of the House committee, resigned be cause of time contraints and his members were not added to the Sen ate committee because it was already well into its planning stages and new Michael Gaduski Brenda Clapper and their Spring 86 pledge class Dave Reistater "I think it's very good it didn't go through," he said. ". . . I'd like to see the state develop a more comprehensive policy towards alcohol before it starts passing legislation." Opposition centered mainly around linking the underage drinking to revoking driving privileges, said Pat Beaty, an attorney and spokesman for state Sen. Michael A. O'Pake, D-Berks. Proponents of the bill touted revocation as a necessary deterrant to underage drinking. During public hearings on the bill in January, several alcohol awareness groups, in support of the bill, pointed to statistics of teen-age drinking and alcoholism as well as drunk driving deaths. Beaty said most senators agreed deterrants were needed but thought the bill was too severe. Stauffer, speaking on revoking driving priv ileges, said he believed a penalty that far removed from the crime would set an unwanted precedent in Pennsylvania. "In my judgment it's overkill of the worst kind," Stauffer said. Drew Rieco Rich Sembrat Doug Rhubright Greg Schultz R.J. DiCamillo Jeff Zimmerman Willis Fulkerson Mary Kitner Danielle Morris members would have set it back, Colorito said. The committee is also going to confirm all appointments before it leaves for Harrisburg, Colorito said. Last year, legislators were not avail able when GRC members went to Harrisburg and were not contacted in person. "Those few occasions made the day not as fruitful as we would have liked," he said. In setting up the appointments, the goal, Colorito said, is to demand to see the legislator, or at least a top aide. Another problem with last year's lobby was that the lobbyists had left for summer vacation when the bud get vote came to the floor in June. Colorito said this year he and several USEC members will be around to give last minute pitches before the vote. GRC, as well as the rest of the University's lobbies, will concentrate on differential funding a plan whereby the University would re ceive a higher appropriation because it does extensive research, which benefits the whole community more than on the operations portion of the budget. "Differential funding is what we're keying on," Colorito said. ". . . Oper ating costs are pretty obvious in Ricky Rylott David Suto Eric Bevevino Another objection to the bill was the severity of the fines and increasing the penalty from a sum mary offense to a third degree misdemeanor which would mean a permanent criminal record. Stauffer, referring to the "penalty placed on the parent," said the fines were too high and having a child arrested would be an unnecessary embar rassment to parents. The bill would fine first offenders a minimum of $5OO, second offenders, $l,OOO and subsequent offenders, $2,000. Stauffer added that some legislators objected to an amendment, passed Monday, to prosecute 16 and 17 year olds as adults. Beaty said that many times a bill sent back to committee "means it's not going to come out again, but that's probably not the case here." The bill has already been scheduled for revision and will probably be modified and sent back to the floor, he said. terms of their necessity. Differential funding, in their eyes, is not." One of the main problems the Uni versity faces in lobbying is competing with schools in Philadelphia and Pittsburgh, which have several legis lators in or around their districts. Colorito said it is difficult to influ ence legislators who have vested in terests in another university and also skyrocketing employment and racial problems. He said the lobby will argue that more money for Penn State will help higher education, which in turn helps the whole Commonwealth. Unfortunately, that's a long-term thing and most of these (legislators) think in short terms," Colorito said. The situation has put more em phasis on inclusion of Commonwealth campuses in lobbying as a means of reaching more senators and compet ing with Pittsburgh and Philadelphia schools. Colorito said he had discussed the possibility of getting student govern ment association presidents from the campuses involved and "at least get them to duck into their local office and make a pitch." However, the proposal would have to be discussed by the Council of Commonwealth Student Govern ments before it could be put into effect. Limited Supply of La Vie 'B6 Yearbooks Still Available in 209 HUB You can have a yearbook packed with 584 pages of Penn State memories, for just $2O cash! FOCUSING ON YOU - LA VIE 'B6 0218 1 0154. rl C 2/ 4it !ft • 1 SPECIAL PHI-PSI. OFFER pcionommonagummEtrommonimomesuim - m M 50$ OFF M $l.OO OFF 111 m The purchase of i the purchase of iii any 16" pizza. iiii any 12" pizza. 111 Coupon expires 4/14/86 • Coupon expires 4/14/86 niMINUMUMEMNIMIIIMMEMBENIMUMUMMinininiiiiiM 4c/ -;ff THE.USAF-' .- - O'CHALLENIGECUE::: :::......yy.,.q... : ....::...........:..........:....„...,........ ::.. ........ : . !':-...:.,".w0mrEN75...iv.....pti,...F...y.:..p......j.,::,:::..:::;..::..:.:,.......:,:: Enter To Win A Free Ticket at the Tenn State 93coolc§tore on campus - Drawing - April 17th Calk - First Round Matches - April 20th 1:30 PM Cuba vs. Korea 3:30 PM Peru vs. USA Sponsored by the US Volleyball Association Tenn_ State `Bookte:ore on campus Owned & Operated by the P en nsyl vani a . State University • The Daily Collegian Friday, April 11, 1986
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