Essential Tips to Establish Good Credit As a Student

After you leave college, you will discover how much having good credit is necessary to acquire certain items. But you don't have to wait until you're out in the 'real world' to start understanding and building a good credit history. Just read this blog to get some tips that can help you get started. Schools offering Finance degrees can also be found in these popular choices.

building good credit tips

How to Build a Good Credit Profile While You're in College

College is a time to prepare for the rest of your life. So what better time to establish a credit history? One thing you'll learn shortly after graduating college is that good credit is vital. It will be checked when you go to rent an apartment, purchase a house or even buy a car. Credit is there to help people know that you are reliable in paying off debts and are not a large financial risk. So the better your credit score is, the easier life will be for you in your future. But what can you do while you're in college to prepare? Simply take a few easy steps to establish a good credit history before you actually need one.

Get a Credit Card

One of the easiest ways to get good credit is to get a credit card. You might think that not spending or getting into debt will give you a good credit history. Actually, it gives you no history at all. This doesn't help you when buying a car or house because it doesn't show a possible seller or lender that you're reliable. So a credit card is a good start. There are often good deals for students, so check around at different banks before you decide. You'll be able to find cards with rewards points, no monthly fees and easy to understand payment methods. Once you find a card that's right for you, you're on your way to a good credit history.

If you cannot get a credit card, consider getting a gas or store card that will influence your credit score. Make sure the interest isn't too high and that payments are reported to the credit bureaus, so you can build a good credit history.

Use Your Credit Card Wisely

When you get the card, you'll need to start spending a little. No need to make big purchases or go on shopping sprees. Just small regular purchases that you'd make anyway every so often will do just fine. You'll be able to track your spending and regulate it either online or in a paper report you get from the bank Make sure that you have plenty of credit available on your card at all times, so you don't end up with more debt than you can handle.

Pay Off Debts Regularly

Speaking of debt, make sure you pay off your balance systematically. Having too much debt on your card can give you a bad credit score, and missing payments or maxing out a card will give you a poor credit history. You can make it easier on yourself by setting up an automatic transfer payment online so that you never forget. It's also a good idea to pay off the amount you owe in full every time; that way, debt doesn't build up slowly over the weeks and months. If you regularly pay off your balance entirely, your bank may even increase the amount of credit it gives you.

If you don't have a credit card, you can still avoid having a negative credit rating by paying other bills on time, such as rent, utilities, school loans and furniture store credit.

You can sometimes set up automatic bill pay through your bank account like you did for credit card payments, so you don't have to worry.

Don't Apply for Credit Too Often

When you check your own credit, this is called a soft inquiry and does not affect your credit score. However, frequent hard inquiries (when a company runs your credit) into your credit will only make the score lower. Hard inquiries negatively affect your score the most when you apply for credit with numerous companies over a short period of time. A good rule of thumb is to wait at least 90 days after you've been denied by a lender (such as with a credit card) to apply for credit again.

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