With tests, student loans, and plenty of studying, credit scores are often forgotten during college. However, these years are a great time to start working on your score. When you graduate, if your score is strong, it will help you get the things you need, like a car or an apartment. Here are some small things you can be doing to help build and improve your credit score as a student.
Open Bank Accounts
If you don’t have them already, you’ll first want to open savings and checking accounts with your bank or credit union. It can help you learn to manage your money while also giving you more freedom if you choose to get a job while in college or you decide to get a credit card. Banks will also see this as a good sign when you do apply for credit.
Get a Credit Card to Improve your Credit Score
This one is a bit obvious, but many don’t know that there are several options when it comes to credit cards. Some banks will require you to have credit already, while others will take your banking habits and income into account. A student credit card may be a more expensive choice in the long run, so it’s advisable to first check with your bank.
Other options come from stores. Many companies like Walmart, Target, and Disney offer cards to eligible applicants. However, you will want to carefully read the terms before you accept any credit card, whether from a business or a bank.
Co-Sign
The best way to start building your credit is perhaps co-signing with your parents. If they will co-sign with you on a small loan, you could easily be on your way to improving your credit. You may also want to consider asking your parents about becoming an authorized user on their accounts. If your parents have good credit, it will help yours as well. This is one of the most popular choices for building your credit in college.
Things to Remember
Whether you’re getting a small loan, becoming an authorized user on your parents’ account, or getting a credit card, there are a few things you should remember. The most important: always pay on time. Failing to do so can cause much more harm than good and several late payments could result in your credit score dropping significantly.
Another great tip is to always pay off your balance at the end of the month. This will help you from accruing debt and paying the interest that accumulates.
A third tip is don’t forget to use your card or accounts. It won’t help you if it’s lying forgotten in your wallet and never used.
Getting started building your credit is the hardest part of improving your credit score, but once you get it moving and keep on top of any bills, interest, or banking, it’s sure to keep on the upward trend. Talk to your bank or credit union about any options that may be available to you or your parents.
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