How to Build Credit While Attending College
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While a college campus is a hotbed of learning, most students are in serious need of a class on credit 101. Teens are not traditionally thought of as responsible spenders, and most students enter campus without even knowing the basics of building and maintaining good credit. Often saddled with student loans and other debt, it's more important than ever to get schooled on good credit habits.
Piggyback on Your Parents' Credit
Just-starting-out college students seem like ideal applicants for credit, yet the old catch-22 still applies. To get a credit card, you need a credit history. One way to get into the game is to piggyback on your parents' credit. If they agree to list you as an authorized user on one of their accounts, you now have a credit history. Your parents don't even have to give you a card for the account for it to work in your favor.
Apply for a Student Credit Card or a Secured Credit Card
If parental help isn't possible, you can apply for a credit card specifically designed for students. These cards have less stringent income and credit requirements. The same is true of gas and retail store cards — they're easier to get, and they help build credit.
Another idea is to talk to your bank about a secured credit card. You deposit money in a special bank account and receive a card with a limited credit limit in exchange. The card converts to an ordinary credit card when the trial period passes, and you can then withdraw your money.
Use Your Credit Card and Pay It Off Monthly
Getting a card is a strong first step to good credit, but your credit history improves faster if you use the card and pay it off regularly. One painless way to accomplish this is to put small, recurring charges on your new card, like Netflix or your monthly cell phone bill. Keep the debt level low and pay off your balance every month. You'll sleep better at night and avoid interest payments.
Be Financially Responsible
A credit card is a great way to jump-start your credit history, but it's not the only information that shows up in your credit report. To keep strong credit, act responsibly in all of your financial affairs. For example:
- Pay all your bills on time, including rent and utilities.
- Keep your student loans to a minimum.
- Don’t co-sign for friends.
- Learn about identity theft and take steps to prevent it.
- Time: How College Kids Can Build Credit by Graduation
- The Unofficial Stanford Blog: Top 5 Ways to Build your Credit Score in College (and Beyond!)
- U.S. News and World Report: 5 Smart Credit Moves for College Students
- Credit Card.com: 10 Ways Students Can Build Good Credit
- USA Today: How College Kids Can Dodge Credit Card Pitfalls