You know you will be heading off to college after high school and that means you are likely to be looking for student loans. While building and having a credit history does not matter when it comes to federal student loans, it can make a huge difference when borrowing money from private lenders.
The Importance of Credit History
Your credit history tells potential lenders a lot about the kind of borrower you are, which is important to them. They want to know whether you are a responsible borrower who will pay back their money on time or whether you are an irresponsible borrower who will give them the runaround when it’s time to pay back the loan. With a good credit history, not only will you find it easier to get a loan but you will get it at a lower rate of interest too.
The problem is building credit can often feel like a Catch-22 situation—you need credit to build credit. Making credit card payments on time, every time is key to building a strong credit history. However, getting approved for a credit card can be difficult when you do not have any credit history in the first place.
The good news is a credit card option available if you are looking for ways to start building your credit history while you are still in high school.
Get a Secured Credit Card
A secured credit card is quite different from a regular card in that you have to fund the card with your own money to get a line of credit.
Those over 18 years of age can get a secured credit card by making a cash collateral deposit. That deposit becomes the credit line for your card. This means, if you deposit $1,000 in the account, you can charge up to $1,000 on your card. While your deposit will not earn you any interest, nor does it give you the benefit of credit, it offers you an excellent option for building credit.
How To Use Your Secured Credit Card To Build Credit
Using your card to make regular purchases and paying off the card balance on time every month will help you build credit slowly but surely. If you make your payments on time every month throughout high school, by the time you get to college your credit history will be good enough to get you approved for student loans from private lenders.
Even better, if your credit history indicates that you are a responsible buyer, you will find private lenders willing to lend you money at considerably lower rates of interest. The smallest reduction in interest rates can help you save a substantial amount of money by the time you finish paying off your loan.
Support Your Secured Credit Card By Taking Up A Part-Time Job
Taking up a job will help you earn some cash that you can put towards paying your credit card balance on time every month, which will eventually help you build credit.
The earlier you get started with working and obtaining a secured credit card (you can only get it after you turn 18), the stronger your credit history will be by the time you get to college and need to take that loan.
Use College Raptor’s free Student Loan Finder to compare lenders and interest rates side by side!
| Lender | Rates (APR) | Eligibility | |
|---|---|---|---|
 |
5.34%-15.96%* Variable
3.99%-15.61%* Fixed
|
Undergraduate and Graduate
|
VISIT CITIZENS |
 |
4.92% - 15.08% Variable
3.99% - 15.49% Fixed
|
Undergraduate and Graduate
|
VISIT SALLIE MAE |
 |
4.50% - 17.99% Variable
3.49% - 17.99% Fixed
|
Undergraduate and Graduate
|
VISIT CREDIBLE |
 |
6.00% - 13.75% Variable
3.99% - 13.75% Fixed
|
Undergraduate and Graduate
|
VISIT LENDKEY |
 |
5.50% - 14.56% Variable
3.69% - 14.41% Fixed
|
Undergraduate and Graduate
|
VISIT ASCENT |
 |
3.70% - 8.75% Fixed
|
Undergraduate and Graduate
|
VISIT ISL |
 |
4.99% - 16.85% Variable
3.47% - 16.49% Fixed
|
Undergraduate and Graduate
|
VISIT EARNEST |
 |
5.00% - 14.22% Variable
3.69% - 14.22% Fixed
|
Undergraduate and Graduate
|
VISIT ELFI |
