How to Build Credit as a College Student

From qualifying for loans to renting apartments, your credit score can play a large role in how you make key decisions and purchases throughout your life. However, establishing and building credit can be difficult – especially as a college student with limited financial resources. Following these tips will help you build credit while still in school:

• Make monthly payments on your student loans. Even though you are not obligated to make payments toward your student loans while still in school, doing so can help you build credit while reducing your loan balance.
• Set up a credit card in your own name. You don’t have to wait until graduation before getting your own credit card. If you’re looking to build credit with a lower risk of accruing debt, a secured credit card could also be a great option.
• Become an authorized credit card user. Becoming an authorized user on your parent or guardian’s credit card allows you to make purchases through their account. Becoming an authorized user is a great option, especially if you aren’t ready to get a credit card of your own.
• Establish new accounts in your name. From phone bills to rent payments, accounts in your name could help build your credit. Even if your parent or guardian helps out with payments, setting up your own accounts can help you establish and grow your credit.

Maintaining a Good Credit Score

Setting up credit-building accounts is just the first step; the way you maintain those accounts afterward is what really counts toward your credit score. Here are some tips for maintaining a good credit score:

• Don’t apply for too much at once. Though it can be useful to have a few credit cards in your name, applying for too many at once could damage your score. Each application is considered a “hard inquiry”, which deducts points from your credit.
• Spend responsibly. If you have been approved for more credit than what you can afford to pay, don’t overspend. Maxing out your credit cards could lower your credit, and not being able to make regular payments could cause your score to plummet.
• Make payments on time. Each missed or late payment can ding your credit score, which is why it’s important to make payments on time each month. Try writing your due dates in a calendar or automating payments to each account.
• Keep track of your credit score. You can check your credit report for free once every twelve months. Doing so not only allows you to keep track of your financial health, but it also gives you the opportunity to look for errors or fraudulent accounts in your name.

Establishing and growing your credit may feel overwhelming or complicated, but it doesn’t have to be! Whether you are ready to open a credit card or you have more questions, People’s is here to help. We proudly serve the Vancouver WA area, and with us, each member gets the same great rate regardless of their credit history. To get started or learn more, just give us a call today!