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How To Establish A Good Credit Rating In College

poorcreditscorePart of going off to college is learning to be a productive member of society. Being financially responsible is a big part of that role. Unfortunately, it can be difficult for students to learn the basics of controlling their own finances, including credit. Building a good credit rating while in college can go a long way toward helping graduates later in life. Having a good credit score is important because it will make it easier in the future to qualify for home and auto loans, as well as possibly getting better rates on them.

Ways to build good credit while in college

*Get help from parents – One of the easiest ways to build a good credit history quickly is to be added to a credit account owned by a parent. The student should be made an authorized user and provided a card associated with the account. Not only will this allow the student build credit fast, but the parent will be able to monitor their child’s usage.

*Obtain your own card – Those who feel they are ready to take on the challenges of owning a credit card may want to apply for their own account. Use it sparingly and be sure to pay off the monthly bill in full in order to avoid paying late charges or interest.

*Research – If the decision has been made to get a separate card, be sure to find the right one. Lots of companies will offer students incentives that can seem like a good idea but will actually result in higher interest rates. Find one with a relatively low limit initially so as to avoid the temptation to charge too much. Look for the lowest interest rate available. Some experts suggest a first card should be a retail card associated with a particular store. They usually do not offer many benefits, yet making regular payments on them will build good credit. One note of caution, however, is that they often will have relatively high interest rates.

*Pay all bills on time – While it’s important to pay the credit card bill on time each month, paying any other bills that are in your name is equally as important. The agencies responsible for setting credit scores take into consideration whether those bills are being paid as well.

*Check the reports – Consumers are allowed one free credit report a year, so be sure to take advantage of it. Even if the credit card is not used often, it is a good habit to get into for later in life. When reviewing the report, check for any errors. If one is found, get it corrected as quickly as possible in order to positively impact your score.

Building good credit can be difficult for college students, but it is worth it later in life. Starting out adult life with a bad credit score will make it more difficult to get ahead after graduation.

About the Author:

Today’s guest article comes from Claire Atkinson. She enjoys writing about financial topics and suggests the following site as a great resource to learn more about credit cards:

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2 Responses to “How To Establish A Good Credit Rating In College”

  1. It is all about habit-forming then, right? What you learn to do in college will do you a whole world of good later on, as you will be in the habit at doing things on time and not forgetting about them. And, when in college, you still have someone to check what you are doing wrong, which is a comfort that might not be available later on.

  2. Great advice! I got a credit card my freshman year and I use it once a month to go get coffee with a friend.