Tips & Tricks for Building Credit as a College Student
You finished high school and got into college; congratulations! Now it’s time to get started—not just on your studies, but on preparing for adult life as well. You may have heard horror stories about college students and credit cards, but the truth is credit cards are a critical part of building your credit so you have great credit when you graduate. You definitely don’t want to wait until after you graduate to start building credit, because part of every credit score is the length of credit history. In other words, you’ll be four years behind if you don’t build credit from your freshman year to graduation.
The first tip is simple. Pay your student loans on time. Some of your student loans may not have any payments due while you are still in school. That is fine. However, if any of your loans do require payments, make sure you pay them on time every month. On-time payments are the key to great credit. If you can, enroll in automatic payments. College can be hectic. You don’t want a big fat ding on your credit report because you forgot to make a payment during finals.
The next trick is to find a credit card that caters to college students. In the real world, you may have no credit at all. Unless you’re working, you might not have any income, either, which makes it difficult to apply for credit cards. However, there are credit cards specifically made for college students. Apply for one right away. This starts the clock ticking on your credit history.
Also remember that you must use your credit card for it to help build your credit. The biggest part of credit scores is payment history, and you can’t make payments if you don’t use the card! However, be careful with how you use it; it isn’t a good idea to use the card for regular spending, because the balance adds up quickly and might compromise your ability to make a payment every month. A useful tip is to set up a monthly payment, such as a utility or other recurring expense, that is automatically charged to your credit card. Set your credit card to be automatically paid off when the balance is due, and then stick the card in a drawer and forget all about it. This ensures you have the same payment amount each month, won’t get gouged on interest from excessively high balances, and build your credit history. By the time you graduate, you’ll have a sparkling credit record that you can then use to get a new car, finance a trip overseas, or cover any other major expense that presents itself. The world may be your oyster, but it opens up easier with a great credit score!
If you’re just starting your college career or you’re the parent of a college student, talk to the experts at Key Credit Repair today to get off to a great start!