Ep. 431: Do You Need Credit to Get Student Loans?

We want to answer your questions about money. Email us and you may hear yours on the air: askpete@petetheplanner.com

This week on the Pete the Planner Show, Damian is back! And …there goes the show. 😅

No time to listen?  Here’s a preview of what happened and when:

Show Notes:


  • “Hey Pete, my wife and I are going to buy a business soon. We’d like to increase our cash on hand for anything that pops up. We’d like to have cash on hand in an ‘Opportunity Fund’ to take advantage of deals that may present themselves. We could build the fund much quicker if we both stopped contributing to our retirement accounts for the next 12 months. We’re both in our early 40s and have done a great job saving up to this point. What do you think about pausing retirement accounts in order to put money into the business?”

    • DAMIAN: Sounds like they’ve done a nice of job of saving for retirement to this point. Putting money into creating a small business is, in a way, like investing towards retirement but in a less direct manner. Maybe split the difference?
    • PETE: Conventional wisdom is, “No.” But there can be exceptions. Rental properties are also a diversified income stream for retirement.
    • “We’ve done a great job saving for retirement” is a relative statement, though. And what type of business are they going to create?
    • DAMIAN: I like that they’ve indicated what they’re using the money for and it’s not going toward lifestyle upgrades, but for income growth potential. Risky, of course, but with intention.



  • [You ever think about how ridiculous it is that kids are given tens of thousands of dollars to pursue an education with no assurance they can pay it back?]
  • “My question is about credit scores as my kids enter their teenage years. College is in our mind. We’ve been saving aggressively. We have about half of the total cost for in-state education for each kid. We think it’s as much as we can contribute that they can finance the rest through work, grants, and loans. Given that loans will be a part of the mix, does it make sense to worry about their credit scores so they get good rates? Is there a way to help our kids get a jumpstart?”
    • PETE: You kid doesn’t have a credit score, nor does it matter. It’s a federal loan with a fixed rate. The only credit score that could come in is yours if you pursue the Parent PLUS loan.
    • PETE: It’s a “NINJA loan;” no job, no income, no assets.
    • DAMIAN: And no, it would not be helpful if there was some sort of credit scoring system for teens.



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