Now a senior economics major at UNC, Tran racked up thousands of dollars in credit card debt as a freshman and is paying the price today.
"I remember I got my first credit card at the Pit my freshman year because I wanted to get this purple Igloo thermos," he said. "I didn't know anything about credit cards so I applied for one."
After reaching the limit on his first credit card, Tran felt compelled to get two more for luxuries like entertainment and eating out with friends. His spending and failure to make payments on time are now taking their toll on his credit rating.
Lenders use credit ratings to determine how much of a credit risk an individual poses.
"A credit score is a way to put in a numerical way what you see in a credit report," said Tom Kelly, first vice president for Bank One.
A credit report, the equivalent of a school report card or r
