Establishing Your Credit Using Student Credit Cards

Student credit cards are primarily tools for building credit history. It allows a student to own a credit card while in school, use it as added support for studying, and establish personal credit history at the earliest possible time.

So the question is, what do students need to know to be able to build an impressive credit? Listed below is the breakdown of how FICO scores are calculated. Considering the following criteria, it would be easier for a student to use a college credit card with care.

1. 35% Payment history

The largest percentage in the FICO scoring system is timeliness of payment. This is quite self-explanatory but surprisingly, many cardholders are prone to missing their due dates. Remember, even if you pay off your bills one day after your due date, that would still be reported as late payment.

2. 30% Outstanding debt

The amount of your debts compared to your credit limit comprises 30% of the FICO score. If you are in the habit of using more than 50% or 90% of your credit line, it could badly pull down your final score.

3. 15% Length of your credit history

How long you’ve had your credit history plays a major factor on how lenders judge a person’s credit worthiness. Obviously, the older your credit history is, the better reputation you will have in the eyes of lenders. Thus, starting to build your credit history while still in school can really work to your advantage as long as you can maintain a good standing.

4. 10% Recent inquiries on your credit report

All inquiries made by lenders in your credit report will also be reflected in the Inquiry Section. This is why consumers are discouraged from submitting multiple applications to various lenders just to take chances for an approval. Applying for credit from too many lenders sends out negative impression and can badly affect your rating.

5. 10% Types of credit or accounts in use

The types of debt you have in your account is another important factor. Being able to handle different types of credit such as credit card, car loan, personal loan, insurance, and mortgage shows your capability as a borrower. As a student, you may have limited financial resources so it’s best to keep your obligations simple.

Having a credit card should be enough and if you need to acquire a student loan, why not try paying off even just the interest rate of your loan while you’re still in college. This way, you can show that despite being a student, you are already practicing good financial management skills.

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 2009

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4 comments for “Establishing Your Credit Using Student Credit Cards

  1. student_geek
    September 16, 2009 at 3:40 am

    Is it really worth to start establishing credit while I’m in high school?

  2. bbc4ss
    September 16, 2009 at 4:02 am


    Yes, if possible because when you’re in college or after college, having a good credit history is not hard for you to apply for loans and other financial services.

  3. legitimate money making
    September 25, 2009 at 3:01 am

    I am planning to apply for a student credit card for my son, he’s now a first year college in a university in CA. This one is really a good topic. Thanks!

  4. bbc4ss
    September 25, 2009 at 3:16 am

    @ legitimate money making

    You’re welcome! 🙂

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