With the average debt for MBA hovering over $35,000 and average credit card debt for grad students at $8,500+, newly minted MBAs will need to understand how to manage their finances once they enter the workforce.

Unlike some other graduate programs, most MBA students worked before graduate school and had ample time to build up their credit scores. Plus, their debt load tends to be less than most other graduate programs — uh, probably because it’s shorter than most. They should know that private student loans impact their credit score in that they may open a credit inquiry.

MBAs probably understand that they should pay off debts in the order of highest rate loans first. I didn’t need Finance 101 to get this. From a pure financial perspective this makes sense. But, MBAs should consider that the order of paying off debts might vary if their goal is increasing their credit scores. Furthermore, I’ll conjecture that a high credit score might secure a better rate on a loan and that would save more money than the high rate card payoff strategy.

In general, student loans should be paid on time and you should put any extra funds towards credit cards first, then to other installment loans like car loans and finally to student loans.

As many MBAs in my program were non-US citizens, I want to point out my episode on building credit for expats.

Source: FinAid.org

Post from: Video Credit Score

MBA Students and Credit Scores – Episode #68