How do I build credit while I'm in college?


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25 September 2019

With a few simple strategies, you can make sure that your credit score is ready to roll before you graduate.

During college, you've got a lot on your plate. Managing your finances probably isn't something you have much time for – but with a few simple strategies, you can make sure that your credit score is ready to roll by the time you graduate.

This will make it easier for you to rent an apartment without a cosigner, buy a car to make the commute to your new job, and even qualify for a credit card with great perks.

Here are a few easy ways to get ahead while you're still in school:

1. Get credit for paying rent.

If you're living in an off-campus apartment, you can start building credit with CreditPop by simply paying your rent on time and making sure it's reported to the three main credit bureaus (Experian, TransUnion and Equifax).

Think that you're already getting credit for this? Think again — most property managers don't share your information with the credit bureaus. You can fix this by using CreditPop to get your rent properly reported to all three bureaus.

Even if your parents are helping out with the rent, as long as you're the one with the CreditPop account, you'll build your credit history.

Using rent payments is a smart way to bolster your credit score without incurring debt, using money you'd be spending anyways.

2. Open a student credit card.

Although you can get into trouble by opening too many credit cards in a short amount of time, or spending more than you can afford, opening a credit card is a good way to start building your credit history.

If you're under the age of 21, you'll need a cosigner, such as a parent or other responsible party, to open an account. Or, you can show proof of independent income or assets if you want to get approved for a card in your own name.

If you get a card, be careful to only spend small amounts you can pay in full and on time. Plan to only use your credit card for large expenses in a emergency situations.

There are many student credit cards to choose from, which you can qualify for with no credit history. Look for cards with low APRs, good benefits like points, and higher approval odds. If you don't have your own income or assets, do your homework and present the options to your folks so they can help you start building your credit history with a student credit card.

3. Become an authorized user.

While opening a credit card in your own name is the most direct way to be sure that it factors into your history, another option is to become an authorized user on a family member's credit card account. This simply means that you can use their card in your name to make purchases and otherwise use it as if were your own.

Legally the primary card holder (your family member) is ultimately responsible for paying the card, but most credit bureaus will factor that credit card on your history, too.

Caveat: Only do this if you have a family member with good credit. Otherwise, it won't help you, and it could potentially hurt your credit score.

4. Manage your student loans wisely.

Nowadays, the debt that most recent grads are dealing with isn't from credit cards — it's from student debt.

If you're using a federal student loans to pay for your education, you have already taken advantage of one of the few times a credit check isn't required to get a loan. (Private student loans, on the other hand, do require a credit check.) Either way, repaying those loans will be a critical part of your credit history.

Though you don't have to start paying off your student loans while you're still in school, there's usually only a six-month grace period after graduation before you have to start paying off your student loans. You could easily miss that first payment and damage your credit score right out the gates if you're not careful.

If you defer your loans to pursue additional education, it never hurts to double check that the payments were successfully deferred, so that you don't end up with accidental late payments.

One of the benefits of building a good credit score now is that it can help you refinance your debt in the future if you need to, not to mention all the other benefits like being able to rent an apartment or buy a car.

Credit, like life, isn't graded on a curve. But by taking advantage of a few of these tricks, you'll start post-grad life with your best foot forward.