How to Build Credit as a College Student: 11 Tips from Experts

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How to Build Credit as a College Student: 11 Tips from Experts

10/4/2023 By University Frames

How to Build Credit as a College Student: 11 Tips from Experts

Building credit as a college student can be daunting, but it’s achievable with the right tips and guidance. We've gathered tips from industry experts like Chief Marketing Officers, Operations Managers, CEOs, and more to help you with insights for your journey. These insights will set you on the path to a strong financial future. 

  • Use Credit Card Responsibly
  • Join a Local Credit Union
  • Manage Your Credit Utilization Ratio
  • Make Student Loan Payments
  • Start with a Student Credit Card
  • Become an Authorized User
  • Limit Your Credit Accounts
  • Follow a Credit-building Strategy
  • Avoid Overly Large Credit Purchases
  • Own Utility Bills in Shared Housing
  • Establish a Budget for Payments

11 Tips to Build Credit as a College Student

Here are the best ways to build credit as a college student. Every way/tip is from industry leaders and experienced professionals.

Use Your Credit Card Responsibly

As a college student, you must wonder how credit cards can help us build a credit score. Here's the answer: When you get your first student credit card, it can be enticing to let it sit around after you've paid your balance. However, the best way is to use your credit card as a debit card. You can use this for bill payments and grocery shopping; however, make sure you pay off your balance each month. 

If paying off your balance daily or weekly works better for you, that's okay too! The point is to beef up your history with a variety of transactions. A history of on-time, in-full payments will positively build your credit score and is easy if you are using your card for things you would purchase anyway!

Colin Palfrey, Chief Marketing Officer, Crediful

Join a Local Credit Union

As a college student, I know how challenging it can be to build credit. But it is possible if you're willing to put in some effort and research! 

One of the best ways to build credit as a college student is to join a local credit union. You will establish a positive credit history by actively using a credit card or loan from a credit union. The great thing about joining a credit union is that they generally have lower interest rates and fees than other banks. They can also offer great advice and resources to help you stay on track with your credit plan. 
Credit unions are often community-focused; they offer special accounts and programs catered toward college students.

Span Chen, Growth Director, Notta

Manage Credit Utilization Ratio

Though your best move with your first credit card is to pay down your loan balance every month in full, you should also be mindful of your credit utilization ratio, or the amount of money you're currently borrowing versus the total available. Your credit score starts to suffer if your utilization ratio reaches 30% or more. So if your only credit product is a $500 credit card, don't let your balance sit higher than $150 or $300 for a $1000 card limit.

If your credit card reaches 30% more than once a month, make payments every two weeks or, as it makes sense—you'll never get dinged for paying down your credit card too quickly, but leaving it too long can become incredibly detrimental. Remember that your utilization ratio combines your total credit, so include your student loans in your ratio calculations.

Jeffrey Zhou, Co-founder, and CEO, Fig Loans

Make Student Loan Payments

To build credit, I would suggest taking a practical approach by making regular payments towards your student loans. Even a small monthly contribution can have a substantial long-term effect. 

I began making payments on my student loans while still attending school, and it played a vital role in jumpstarting my credit score. It's important to remember that consistency and meeting your financial obligations are key. Your credit score will gradually reflect your responsible behavior by demonstrating reliability to potential lenders and consistently fulfilling your financial commitments. 

Haya Subhan, General Manager, First Aid at Work Course

Start with a Student Credit Card

I started by simply applying for a student credit card. You might be wondering," A credit card in college?" Let me tell you how-
Get a card designed for low-limit students to prevent anyone from going overboard. I used mine for small, manageable purchases like groceries and textbooks, then paid it off monthly. 

Student credit cards have helped me establish a payment history, which is a big factor in your credit score. Over time, this strategy helped me build my credit score. Just like a solid workout routine, consistency was key. 

So, this is how I built a credit score as a college student. If you also want to build credit, consider starting with a student credit card. It's a small step but can set you up for long-term financial health. 

Evander Nelson, NASM-certified Personal Trainer, evandernelson

Become an Authorized User

The easiest way to build credit as a college student is to become an authorized credit card user. You can ask for authorization as a user on a credit card from your parent, guardian, or sibling without actually owning it. This will give you a nice credit boost as long as the card owner never misses a payment. Only certain credit cards report authorized users to credit bureaus, so make sure to do the research on which ones work and which will not. 

Max Schwartzapfel, CMO, Schwartzapfel Lawyers

Limit Your Credit Accounts

As a college student with a short credit history, avoid the temptation to open up multiple lines of credit—less is more when first starting. If you open too many credit cards and other loan accounts quickly without a reliable history to back you up, you can get flagged as a risky borrower. And if you try to secure a loan later and can't because of your credit history, you can miss out on some seriously good financial opportunities or get stuck paying higher interest rates. 
Instead, focus on one or two credit cards or loans and make regular payments. Those borrowers with longer histories and fewer credit accounts tend to build the strongest scores (and secure the best loans) over time.

Anthony Martin, Founder, and CEO, of Choice Mutual

Follow a Credit-Building Strategy

Building credit can feel like navigating a confusing maze, but it doesn't have to be. First, you need an open credit card in your name. The Discover IT Student card is a brilliant choice for students.

Next, be mindful of spending. Opt for small, routine purchases like your monthly cup of coffee. Aim to keep your usage below 7% of your limit at all times—the sweet spot for credit utilization.

Most importantly, pay your balance in full every month. Timely payments are crucial as they reflect responsible credit behavior.

Essentially, credit building is about establishing credit, maintaining low usage, ensuring full payment, and repeating this cycle. It's about forming habits of responsible credit usage. While building a robust credit score takes time, consistently following this strategy paves the way for a secure financial future.

Josh Schleifer, Founder, Ministry of Credit

Avoid Overly Large Credit Purchases

If you have a stable income and some savings set aside, it's reasonable to expect that you'll be able to use a credit card for indulgences like a holiday or a new TV in a few years. However, it's crucial to spend within your current means.

Accumulating a significant balance that you cannot promptly pay off impacts your credit score and incurs substantial interest charges. Your credit score considers the amount of credit you utilize, so it's essential to be mindful of this factor.

For now, it is advisable to prioritize responsible spending within your financial capabilities, ensuring that you avoid excessive debt and maintain a healthy credit profile. By doing so, you'll be in a better position to enjoy the benefits of using a credit card for larger purchases in the future. 

Carl Panepinto, Marketing Manager, Easy Allied Health

Own Utility Bills in Shared Housing

During college, almost every student lives in a shared housing situation. Sharing an apartment or house with roommates is essentially a rite of passage. However, while this is usually one of the best times of your life, no one likes to take ownership of the utilities. Yet, this is a low-impact way to build your credit. 

Even having a simple electric or water bill in your name, despite splitting the cost with others, can go a long way toward building up your credit score. These payments are a regular expense; you only pay for a fraction of the total cost, but you get all the financial credit. Taking on the bills is low-hanging fruit for building credit as a college student. 

John Ross, CEO, Test Prep Insight

Establish a Budget for Payments

Establishing a budget is an important step to building credit as a college student. Creating a budget allows you to effectively manage your finances, ensuring you have sufficient funds to make timely bill payments. 

You can maintain a positive credit history and improve your creditworthiness by avoiding late or missed payments.

Jason Cheung, Operations Manager, Credit KO

Final Takeaway

We have explored various ways to build credit, from using credit cards responsibly to establishing a budget for payments.

By implementing these strategies, you can establish a positive credit history and pave the way for a strong financial future.

It's important to remember that building credit takes time and consistency, so be patient and stay committed to your financial goals.

Take control of your financial future and start building your credit today. Your choices will have a lasting impact on your financial well-being, so make them wisely and watch your credit score soar.


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