Today’s article is on how to build credit as a college student. If you have known me for a long time you will know that I always see that your credit score is a very important aspect of your financial life. Whether you are a student or a worker it is very important that you build your credit score gradually and do all it takes to build it properly.
Good credit is going to help you a lot as a college student for getting rent and other. As a college student, it is never easy building credit however it is still very possible to build credit even when in school. That is why I have decided to come up with a detailed article on how to build credit as a college student so that before finishing College you will have strong credit. The
How to Build Credit as a College Student
The importance of building good credit as a college student cannot be overemphasized as it helps you get good amounts on rented apartments, makes you qualify for car loans and so much more. However, the only problem seems to be how do you build credit as a college student and that is what we are answering in this article today.
A good credit score is an important factor in getting a good financial life which is why the sooner you start building your credit the better for you. As a college student, your means of credits are not as much as those that are working however it is still very much possible. That being said below are some of the ways how to build credit as a college student.
Build your Credit History
The first step to start building a very good credit score as a college student is to start building your credit history. If you do not have a credit history it is very obvious that you will not even have a credit score so you need to start building your credit history today. To start building your credit history you need to open a credit card or take out a loan and make sure you pay back responsibly.
Become an Authorized User
If it is not possible for you to apply for your own credit card then you can decide to become an authorized user instead of getting your own credit card. You can simply have your parents or your Guardian have you as an authorized user on their credit card to help you start your credit-building process.
There are so many benefits to becoming an authorized user like having the benefit of your own credit card and access to the limit of the card holder’s credit. Another benefit is that you will not have any legal responsibility to pay credit card debt if there is any. Even if you did not make use of the credit card it will still count toward your credit score.
Open a Secured Credit Card
Another option that is available for college students on how to build credit is to simply make use of a secured credit card. A secured credit card basically acts like a debit card but in this case, it actually helps rebuild credit. With a secured credit card, you can only spend money that you have sent into the credit card just like a debit card.
However, you have to be or have a low-risk history in order for you to qualify for the secured credit card which is a very great way to build credit as a student and avoid overspending.
Open a Student Credit Card
A student credit card is very different from a secured credit card because a secured credit card basically acts like a debit card. Because of the fact that students have no money many credit card companies offer student credit card which is also designed for people without much credit history. They are basically designed to help students build credit.
Get a Cosigner
It is not only a case where you are getting a loan that you need a cosigner you can also get a cosigner to sign for a credit card for you. Although cosigner credit cards and not that much or very Common. If you open a credit card cosigner account you are very much responsible for all the charges and payments in the card.
But if you miss a payment this is where your co-signer is liable to pay off the debt in your credit card account. Also, this is where it might become challenging to get someone to co-sign a credit card for you because there are risks involved.
Rarely Apply for Credit Card
After getting approved for your first credit card do not apply for another because it is not a good thing to apply for many credit cards in a short period of time.
One of the reasons not to do this is because it raises a red flag to credit card issuers because some even have a policy against multiple credit card applications. It also establishes a hard inquiry on your credit report which lowers your credit score so it is not a good idea.
Pay Your Bills on Time
On-time payment is one of the best ways that you will use in building your credit. This is because making the payment on time is one of the best ways that count towards your credit score. The three major credit Bureaus regularly track your payment history to know if you missed a payment or not which is why it is very necessary to make on-time payments.
Monitor your Credit Report and Account
Another way on how to build credit as a college student is to simply keep an eye on your credit report. Do not talk about monitoring your credit report so that you do not miss payment or any reward you might have. It will also help you to identify any fraudulent charges so that you can alert the credit bureau immediately if there is a problem.
Frequently Asked Questions About Building Credit in College
What credit score do college students start with?
As a student the credit companies know that you do not have much money so it will not be easy for you to get a regular credit card. However as a student in need to have at least a credit score of 630 between the age of 18 to 24. This is what is considered to be the average credit score of a college student to apply for credit cards.
What is a fast way to build credit?
The fastest way to build your credit is to constantly make a regular on-time payment just as I have mentioned on this article. Any missed payments that is in your credit account will report in your credit report for up to 7 years which will affect it. Therefore it is very important to keep on making on-time payments.