Simple Tips to Good Credit for College Students

Image by GotCredit, Flickr

Image by GotCredit, Flickr

Credit is fairly essential in today’s world. And at this stage of your life, there’s good news and there’s bad news. The good news is, you probably haven’t had a chance to ruin your credit just yet. The bad news is, you likely haven’t had the ability to build any credit history either. In order to get credit, you need a credit history, and it needs to be good. It’s important, however, that you know what you’re doing before you start building credit in order to avoid common mistakes that will haunt you and your credit score for years to come.

Take responsibility for your own finances and credit history

As a college student, you’ve already taken an important step towards moving into adulthood and making your own decisions about your future. Now, you need to go one step further and take responsibility and ownership for your finances and your credit. While you may still need some help from mom and dad, it’s a good idea to move into the mindset that the buck stops with you.

Learn to save, budget and track your finances

Once you’ve taken ownership of your financial situation, you can start controlling it. It’s never too early to start saving. This is a valuable skill that will serve you well your entire life, but one that most young people aren’t taught. Your first step should be tracking all of your finances – your incoming and your outgoing. is a popular application for this task. This will demonstrate how you’re spending your money and help you create a workable budget. Resolve to stick to a spending plan and to pay yourself first by putting money into savings.

Don’t max out on student loans

Student loans are another thing that will follow you for many, many years. It’s important that you only borrow what you need. Look very closely at all the lending terms, such as the interest rate and repayment terms. Don’t just accept whatever the school suggests. Do your research and compare lenders. It’s a good idea to consider a part-time job while attending college to help offset your educational costs instead of relying entirely on student loans.

Educate yourself about credit and credit scores.

You’re in college, so you understand the value of education. Understanding how credit works, credit scoring and how your financial decisions impact all of this, are essential for building credit and making smart financial decisions. Many credit card issuers now offer several tools, services and tips to help card holders keep track of their credit score and their card usage, and to be responsible with their finances.

Get a credit card and use it wisely

Research credit cards that are available to college students (here are some). Don’t allow yourself to be distracted by “shiny” offers. Identify what you need in a credit card and look for those features. After you narrow down your search to 2 or 3 possibilities, carefully read all the terms and conditions to make sure there are no nasty surprises in store. Once you’ve chosen and received a credit card, treat it responsibly and respectfully. Pay on time every month. Don’t max it out, and keep track of your credit card spending on a regular basis.

Consider becoming an authorized user

Despite the large number of credit cards targeted towards college students, you may not be able to qualify for one right away. If this is the case, you may want to speak to your parents about being added on one or more of their cards as an authorized user. Being added as an authorized user with bad credit or no credit can be a very effective way to boost your credit score and enable you to then qualify for your own credit card so that you can begin building credit through experience. Your parents can use this method to help you start on the path towards a long and excellent credit history.

This article was contributed by guest author Michael Austin.

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