How to Build Credit in College

For students, a first credit card can be a great start to financial success

Why Building Credit Matters

Credit score in America is actually very important no matter what your age. A common misconception is that students don’t need to build credit because they only need good credit for things like financing a new home. If you’re a student however, credit can impact you right now. In fact, it’s determining your interest rate for student loans and if you’re thinking about consolidating your loans after graduation, a good credit report could land you a better interest rate.

How to Build Credit

1. Choose a Card That’s Right for You

Getting a first credit card can be difficult, but there are a couple good options to start out.

2. Learn to Use a Credit Card

Simply having a credit card doesn’t help you build credit — you have to actually use it! If you use your card responsibly, you can start building a great credit score over time.

3. Build Good Financial Habits in College

We’ve explored this topic more deeply in another article, but the basic here are simple: Create a budget, set up an emergency savings account, and make sure you have a source of income (even if it’s from your parents).

Reaching a credit rating around 700 is an appropriate goal for college students who start early.

Build Credit in College!

In a 2016 study from Student Monitor, students with a credit card in their own name reported having a mean credit score of 679. In contrast, students who didn’t have one had a score of 629.

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First Degree Advising

First Degree Advising

A group of academic, career and financial advisors guiding students to a better return on their college investment. Blog authored by lead advisor Sean Kelly