How to Build Credit in College.

Having good credit can open up a number of possibilities. A healthy credit score will allow you to rent property, buy a car and even a house. In addition, having a good credit almost grantees a low-interest rate when taking out loans.

Building a credit score in college can be tricky, but it isn’t impossible. Here are some ways you can begin to build your credit score in college.

Make on-time loan payments.

Your credit score is dependent upon your ability to repay your debt, so demonstrating timely payments can greatly improve your credit score. If you start making student loan payments in college, you can have an early start in building good credit.

Get a secured credit card.

With a secured credit card, you deposit your own money as security for your purchases. Your credit limit is equal to the amount of your deposit, making it a good way for someone with no credit to build a good credit history. If you’re making regular payments, this could greatly help your credit score.

Practice good credit habits.

 Once you start your first line of credit, with either a credit card or loan, you want to manage your payments wisely. Make sure you pay off your balance on time and in full to build a good credit score. It also shows lenders that you are reliable and punctual.

Also, try to avoid opening multiple accounts at once, especially at the start. People with a short credit history who open new accounts in a short period of time can be a red flag for lenders.

Become an authorized user on a family member’s credit card.

An authorized user means you can use someone else’s credit card in your name. You are still able to make purchases with the card, but it is your family member who will make the payments. The primary cardholder, your family member, can make you an authorized user by adding your name to their credit card account. It’s a good way to ease yourself into building your own credit.

Get a co-signer

If you are under the age of 21, you can ask a parent or a guardian if they could become your co-signer to open a credit card. Lenders find handing a line of credit to a college student very risky, but having a co-signer transfers the risk to a more reliable individual with a longer credit history.

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