How to Build Credit History While In College

Being in college can be one of the most thrilling experiences in life.  This is time when you become more independent in many ways, including financial independence.  It is also the perfect time for you to start building your personal credit history- an essential preparation for your financial future.  In this article, we will tackle the ways on how you can build good credit while in college.

1. Acquire an extension credit card from your parents.  Your parents can teach you a lot about how to be responsible with managing finances.  One aspect is using your credit card correctly.  It’s a good idea to start by acquiring an extension credit card. This way, your parents can monitor your spending and give you the advice you need.

2. Apply for a student credit card. After proving that you can handle a credit card responsibly, then you’re ready to apply for your first credit card.  Your parents can help you out in choosing the right student credit card from a long list of choices.  Keep in mind that choosing the right credit card is just as important as proper management.  See to it that your chosen student credit card will be reporting your payments to the three major credit bureaus as it is the only way you can build credit history.

4. Use your student credit card regularly for small purchases. If your credit card is just sitting in your wallet, then you will not be building up your credit.  Thus, you should use your card at least once a month, making sure that you are able to pay back your full balance on time.

5. Plan your credit card purchases. If you would like to use your student credit card to buy something you need, make sure that you will be able to pay back your balance in full on or before your due date.  If you’re out in the mall and saw an item on sale, resist the temptation to buy out of impulse thinking that you can charge it to your card anyway.  Many students have fallen in the trap of bad credit because of this philosophy.  If you did not plan to purchase it in the first place, don’t charge it to your credit card.

6. Practice prompt payments. As a cardholder, you should do your best to submit all your payments on time.  Try to pay your bills as early as you can. You don’t need to wait until your due date before sending your payment. If you have the money, post your payment right away.  The same principle applies for all other debts you owe, including your student loans.  Remember, your credit card is not the only thing that will affect your credit history.  All your credit activities which are reported to the bureaus can affect your final rating.

7. Do not apply for multiple credit cards at one time.  If you want to get a second credit card, wait for a few months before applying for new credit.  Remember that each time an inquiry is made on your report, your credit score will drop.  Managing multiple student credit cards can also increase the risk of uncontrolled spending especially since you do not yet have a permanent source of income to cover for your credit card bills.  While you’re in college, it’s best to stick with one credit card.

About the Author

Samantha Wilson is a consultant for credit cards for students. For years she has written student credit card articles that would help build student credit.

Copyright 2011


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