Establishing Credit History for the First Time

One of the most important aspects of being financially independent is establishing personal credit history. If you are a student in college, this is the perfect time for you to start thinking about establishing and building up your credit rating. Listed below are tips for first time credit builders on their first credit card:

Open a bank account. Although a savings or checking account will not be reflected in your credit report, it is a great way to get an easier approval from prospective lenders. If you have your own bank account, a lender would have more confidence in your ability to manage credit and debt repayment.

Apply for a student credit card. As a student, you have the privilege to get approved for an unsecured credit card without difficulty. Under the New Credit CARD Law, consumers who are under 21 years old must get a co-signer or must have independent income to get approved. If you are under 21, your parents are the best candidate to act as your co-signer, as long as they have good credit history.

Apply for a secured credit card. For students who do not have a co-signer, a secured credit card is a great option. Unlike a student credit card, you will be required to submit a cash deposit in your account which can range from $200 to $500, depending on the credit limit you want. Youngsters who are starting to build credit history are advised to start with a low limit ($200) to exercise control over their credit card spending.

Get a department store card. Another way to start building credit history is to get a credit card issued by your favorite department store. A lot of merchants offer store cards to their loyal customers and offers credit reporting to the credit bureaus.

Get a gas station card. If you drive your own car, perhaps you may consider getting a gas station credit card from your preferred gasoline company. Just make sure that the company does offer credit reporting to the three major credit bureaus.

Use your credit card regularly. Keeping your student credit cards or secured credit card in your wallet will not help you build credit history. You can only build credit by charging expenses to your card and submitting your payments on time. As a student, this is your chance to prove that you are ready for financial independence and the responsibilities that comes along with it.

Check your credit report regularly. Consumers are advised to check their credit reports at least once every six months to ensure that it contain accurate information. Keep in mind that you have the privilege to order one free copy of your report from the three credit bureaus each year by visiting In case you find errors in your file, you also have the right to dispute or request for corrections by sending a letter to the bureau that issued your report.

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 2010

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