The Professor's Perspective

Current and prospective accounting students often don't understand the 150 hour rule. That's "understandable" (I couldn't resist!) because what we refer to as a rule is anything but standardized.

The truth is that though nearly all states and provinces have adopted "the 150 hour rule" it varies substantially from location to location. So here is some information to help you sort through the complexity and decide what is best for you.

What is the 150 hour rule?

Let me just say this straight out: unless you've already accepted a job (or internship) for next summer, you should go to your university's job fair.

I'll go further than that! If you are a student at a small university like mine, you should also go to the job fair at the large university close by!

There are lots of reasons.

Last week we talked about the utilization ratio, the amount of your outstanding debt divided by the amount of total available credit, and the importance of using credit cards and lines of credit since banks are closing unused accounts. This was important because when an account is closed, the utilization ratio rises, which has a downard effect on your credit score. This week, let's examine other ways to protect your credit score.

Your credit score depends on several factors:

Payment history about 35%
Amounts owed about 30%
New credit about 10%
Utilization ratio about 25%

You probably know that whether we get a loan or credit card, and the interest rate that debt carries, is largely determined by our credit score. What you may not know is that recent actions by banks may have reduced your credit score even if you carry a reasonable amount of debt and always pay on time.

Most of us are aware of the mortgage abuses that were a large part of the current economic crisis. We’ve heard that getting mortgages is hard right now. But we tend to think that we won’t personally be affected if we are good credit risks and bought within our means. Recent changes in the rules covering appraisals can make that assumption incorrect.