How to Build a Good Credit History While at College
Brought to you by: Breez DeGuzman
Many college students yearn to be considered as adults, despite the fact they’re barely out of high school. They often think having a credit card will give them the status they seek. Unfortunately, college students sometimes make bad financial decisions. Here’s how to build a good credit history while in college rather than ruining your credit.
Good credit is so important. Not only will it help you receive decent interest rates when you’re trying to buy a home – having a good credit rating can also affect whether or not you get hired for a job, since some employers are now looking at your credit history. It can also affect what type of deal you can get for a cell phone and how much you’ll pay for insurance.
Check your credit report even if you don’t think you don’t have a credit history. You can order a free credit report from each of the major credit bureaus once a year. The report is used to determine your credit score, which is what creditors look at when deciding to extend credit to you.
If you don’t think you have a credit history, it’s still a good idea to get the report to ensure there aren’t any errors. You could be a victim of identity theft or there could be an error where someone else’s information has been added to your report. It’s better to get the report now rather than wait and have your entire credit history ruined because of an error or identity theft. This will also give you an opportunity to get any errors corrected before they do too much damage.
Think about opening checking and savings accounts. Lenders see these types of accounts as signs of stability. They are also the only accounts you can have as a minor that can affect your credit history. You’ll have to wait until you’re at least 18 before you can apply for a credit card.
How is your credit score determined? It is determined by comparing how much of your available credit you use and whether or not you pay your bills on time. If you have a credit card with a $500 limit and you have it maxed out, your credit score may take a dip. Paying your bills late will also make the total score go down.
To ensure you pay your bills on time you can either set up automatic payments or mark them clearly on your calendar so you’re not late. One missed payment can affect your score and it won’t be taken off your report for seven years.
Try to keep the balance you owe on credit cards less than 30%. This will keep you from getting into credit card debt you can’t pay, and will help you maintain a good credit score. Paying off your balance each month is also a great way to build your credit history while at college.
Remember, credit cards are like a double-edge sword. With one edge you can build your credit history. With the other you can tear it down. Once you’ve learned how to build a good credit history while at college, don’t neglect it. You’ll want to get your credit report each year and ensure your credit history stays good.
Related posts:
- Raise Your Credit Score Keeping It In Good Standing Here Are Great Ways to Raise Your Credit Score and...
- Smart Ways and Tips to Using Your First Credit Card Here are smart ways and tips to build your credit...
- Credit Score Formula Can Change Mortgage Qualifying Credit score formulas have recently changed affecting the qualification of...
- Important Easy Ways To Track College Expenses That Will Not Take You By Surprise Brought to you by: Breez DeGuzman Tracking expenses can be...
- Smart Great Tips for College Students to Live Frugally and Still Have Fun Brought to you by: Breez DeGuzman For college students who...
Related posts brought to you by Yet Another Related Posts Plugin.
