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How to build credit as a college student?

I’m still a college student but adult life is creeping up on me. I’ve decided to take care of my credit score as it is one of the most adult things to do. Building credit as a student is not easyfrom what I’ve heard. Working on student’s first credit score may sound very complicated for the youth. I’m one of them and don’t understand the main principles. How is it done? Why should I worry about it at all? It’s not like I’m going to buy a car in the following years. Could you please tell me a little more on the question of how to build credit as a college student? What is a good student credit score?

Naomi Doyle

in Student Loans

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Melissa Norris on January 30, 2018

Well, I would like to say not to worry about building credit as the student you are, but, unfortunately, the reality is that it may come in handy not only for buying a car or a house. First of all, its primary value concerns the student loan you may or may not have. That means that the lower your credit score is, the more you will pay. So, this is an effective way to say goodbye to the loan sooner. In addition, it impacts your future business with the insurance companies, landlords, and, even, employers. You may even save on some basic needs like house bills.

Okay. Now, let’s look closer at the importance of the students’ first credits and try to understand how it is calculated. There are five core factors that impact your score.

1. The first factor is your payment history. Have you been paying your bills on time? This is the most important point that comes up initially.
2. The total amount of your debt. This aspect doesn’t concern your student loan only, it includes all debts that you have in other spheres. Having some amount of money in debt will not destroy your score, but it is a crucial factor nevertheless.
3. The length of your credit history. Being a novice means a lower credit score. The longer you have open accounts and credit cards, the better chances you have.
4. Credit mix. This aspect is a little bit harder to understand than the previous points. Credit mix means of all your credit accounts under your name. It includes everything – from credit cards to mortgages.
5. New account. Creating several new accounts during a short period of time only makes your score lower.

These are the main factors that influence students credit scores. If you wonder how to build credit as college students, there are a few pieces of advice I can give you. First of all, ask your parents to authorize you to their credit cards. Their history will become your own, it’s especially good when they have a positive one. You can also get your own student card; just don’t spend all money at once.

Pay off your debt every month in full. Pay other monthly bills regularly as well. This aspect influences your score as well.

And, finally, consider acquiring alternative credit cards; for example, a secure card. There are some other types that may come in handy. However, don’t let them simply sit in your drawer – the score won’t improve this way. Don’t open and close your accounts too frequently.

This is only the most basic advice I can give you. There are many other aspects to consider.

Emily Alexandera year ago

Yes, I completely agree with these points. The only thing I would like to add are a few major “don’ts” of building credit as a student.

Speaking about adding an alternative student credit card, I would recommend holding this off for a little bit. Opening too many accounts may be not taken in a positive way as well.

The second major “don’t” is not to spend all your money without knowing how to repay it next month. It has been already said, but the aspect cannot be highlighted too much.

Don’t co-sign a credit card of your friend. No matter how good a person you think they are, financial dealings have to be set apart from the friendly ones. You cannot surely say that they can pay back. Just don’t risk.

If you want to find a few other details, here is an article that describes the process perfectly.
https://www.thesimpledollar.com/how-to-build-good-credit-in-college/
However, it’s a lengthy read.


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