And just like that, summer break is over! Whether you’re starting as a freshman or beginning your final year and gearing up to “the real world” it’s time you started considering how your credit will affect your future.
It may be the last thing on your mind, but college is a great time to work on building a credit score from scratch. If you work on building credit while in school, you could graduate with a healthy credit score to give you a head start in life.
Why Building Credit is Important
Landlords, prospective employers and even cellphone providers may pull your credit report as part of a background check, but there won’t be anything to see if someone has never managed a line of credit.
Graduating with a good or excellent credit score puts you in a great position to rent your first house or apartment and, eventually, make larger purchases like a new car or a first home. On top of that, you’ll qualify for the best terms when it comes to borrowing personal loans or opening credit cards.
So how do you go about getting that score up to the high 600s to mid-700s? Here’s 5 ways to get you started…
1. Consider a Student Credit Card
While graduating with student loan debt and credit card debt isn’t a good thing, using a student credit card wisely is a great way to quickly build your credit. Learning to manage credit sooner rather than later carries big benefits. Student credit cards are designed for people ages 18 to 21 who have limited or no credit history. You can really give your credit score a boost by keeping your credit card balance as low as possible and paying it off promptly. By doing so you won’t pay any interest and you’ll boost the “amounts owed” portion of your credit score.
2. Become Authorized on Your Parents’ Account
If you’re not authorized to open a Student CC, another option to boost your credit score is to become an authorized user on your parents’ card. If their credit score is high, you’ll be able to jump onboard and build credit history – while never having to actually apply for credit yourself.
3. Pay off Your Balance Each Month. ON TIME.
This is vital if you want to build and maintain good credit. Just ONE late payment can damage your credit score dramatically and stay on your credit report for years (which can be seriously harmful to someone just starting to build a credit history).
Know your payment due dates; write them down on a calendar, set payment notifications on your phone – ANYTHING to make sure you make your payments on time.
4. Build Credit via Your Rent Payments
Yes, that’s right, you’re paying rent anyway, so why not make that payment serve both your housing and credit-building needs?! If you rent an off-campus apartment, you can build your credit history by simply paying rent on time. Your payments will be included on a standard credit report and can help build good credit history without ever opening a line of credit.
Make sure your landlord reports the rent, if he/she doesn’t, ask them to sign up at for a rent payment service like PayLease or RentTrack that will let you pay rent online and give the landlord the option to report the payments to the bureaus.
5. Keep on top of Your Credit
Finally, as you’re building your credit score, it’s very important for you to monitor it. Each credit bureau provides the opportunity to obtain a free copy of your credit report annually. You can contact:
- TransUnion: Visit www.transunion.com, call 800-888-4312 or mail in a request to TransUnion, 2 Baldwin Place, P.O. Box 1000, Chester, PA 19022.
- Equifax: Visit www.equifax.com, call 800-846-5279 or 866-322-3162, or mail in a request to Equifax, P.O. Box 740123, Atlanta, GA 30374.
- Experian: Visit www.experian.com, call 888-397-3742, or mail in a request to Experian P.O. Box 919, Allen, TX 75013.
- Free online credit reports are available at: www.annualcreditreport.com
You should check your credit report every few months and your actual score a couple of times a year.
By checking your credit report every few months you can spot common reporting mistakes before they cause serious damage to your credit later down the line.
Personal Loans from TLC
Whether you’re a student the banks have abandoned or simply need to pay off an unexpected expense, Total Loan Company can help.
At Total Loan Company, LLC the loans we make are as individual as the people who apply for them! We make borrowing easy, convenient, and affordable with fast personal loan solutions.
If you have a question about our application process please contact us. At TLC, we want to understand your story!