How college students can build good credit


Having good credit is something kids hear about a lot but aren’t really taught about. The biggest mistake most people make is thinking that having no liabilities means their credit should be perfect. These people are very surprised when they finally apply for a mortgage and get denied due to their non-existent credit history. The important thing to understand here is that a credit score shows how you deal with your credit; if you have no recorded credit, then the score will not exist either. College is therefore the perfect time to start creating good credit, making it easier for you to be approved for loans in the future. The basic idea is to deal with your credit maturely so institutions can check your report and see that you are trustworthy when it comes to credit. Here are a few ways you can start building a good credit score:

First Step: Get a Credit Card

Getting a credit card is the first step towards building a credit history. Till a decade ago, it was common for banks to bombard students with advertisements and salespeople to get them to sign up for credit cards. This has been banned in most places since and is not an activity the banks are keen on anymore. The biggest hurdle towards getting a credit card for students is that some sort of income has to be shown. If you are working as well as studying, then you will not have any issue showing proof of income and getting the card.

If you are not earning at the moment and are being supported by your parents, we would recommend asking your parents to add you to their credit and give you a card. Since your parents have a credit history, they will be able to easily get the card and you do not even have to use it. Just having your name associated with someone else with good credit can raise your credit score.

You can also apply for store brand credit cards. They are very easy to get approved for and allow you to make small purchases, which helps build a credit history.

Second Step: Make sure your credit card payments are on time

Irrespective of how you get the card, remember to use it very wisely. Do not miss any payment and do not accrue interest that will end up damaging your credit history even before you have time to have a good credit history. If you think you are going to miss out on a payment, we would recommend getting a loan from family and paying it on time.

Third Step: Pay all your bills on time

Having a good credit score means that you are good with your money. Do not expect to be able to delay bill payments and still have a good credit score. Phone bills, utility bills, any type of unpaid bill can damage your credit a lot.

Just by following these three steps, you will be able to start building good credit repair. This will make it easier for you to be approved for many types of loans in the future, so take this seriously.

Ravi Singh

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