College Students: Tips To Build Your Credit History
As a college student, it can be somewhat difficult to obtain credit. Or, it can be too easy to do so. If you are looking for a way to pay for your fees at school, looking for a solution for those meals at school or just need it for emergencies, there are plenty of concerns that should be first on your mind. Here’s the problem. The credit that you get in college is either going to make you or break you. It is up to you to make the best possible decision about the outcome.
During college, you will need to begin building your credit history. This is the perfect time for you to make a name for yourself. Just be careful as it is often easy to make a bad name for yourself in the process. When it comes to building credit, here are some of the most important things for the college student to know.
You’re A Target
Many credit card companies target the college student because they are likely going to want credit and may even have a cosigner to help them to boost their creditworthiness. Nevertheless, one startling fact remains. According to Nellie Mae, which provides most of the student loans today, the average student that is an undergraduate has over $2000 in credit card debt.
The important first step for you, then, is to be aware of what you are applying for and what you are going to do with it. The credit card companies that offer credit to you don’t have to be the only ones that you work with. Head online to find better rates and more affordable fees. If you can do your homework, you’ll find better companies to work with and save yourself some of the trouble.
Get Your Parents Involved
As a student with little to no credit history, you may need to have a responsible parent to help you to get your first credit card. But, even when this happens, it is important for parents to take the right role in providing that credit. Since creditors are going to charge substantial fees for college students, it is essential that the lines of credit be used wisely. If Mom and Dad will always pay off the card each month, the college student doesn’t learn that pizza isn’t an emergency. Instead, use debit cards or gift cards to help with these costs and allow them to manage their credit card debt wisely, yet still on their own.
Put Yourself On A Budget
It is very easy to pull out your credit card when you are heading out for the night with the guys or to buy a gift for a friend that’s upset. Yet, when you do this, you add up that balance quickly. That causes you to put yourself in the whole right from the start of your credit career. It is a better choice to put yourself on a restrictive budget from the beginning. Remember, you need credit because you are trying to build it for the rest of your life, but you don’t need debt. A budget can help you to stay in line with expenses and keep yourself moving towards a brighter future.
Tips To Live By In The Credit World
- Never make your monthly payments late. Not only does this slap you with a huge fee for a late payment (and hopefully not one for being over your limit) but it also puts a bad ding into your credit score. Just one late payment will tarnish your credit history for the next couple of months if not the next year or two.
- Pay off your credit cards each month. This alone will help you to avoid walking out of school with a large debt. It will also help you to become a better risk for those credit card holders that are interested in offering you better loans.
- Realize that credit is not something that should be used all of the time. Each time that you purchase something on credit, realize that it is costing you whatever the cost is plus another 18% or so. Its costly!
- Don’t apply for too many credit cards at once. You really want to only open one line of credit at a time.
Make sensible purchases that are going to benefit you. There’s nothing worse then getting a credit card bill and saying to yourself, “What did I buy?” College is the perfect time to start building your credit history but it also can be a time to ruin your score, too. For that reason, you should invest in learning the better ways to make decisions about credit. |
