Tips to Help College Students Build Credit
Attending college offers young adults the opportunity to not only increase their academic knowledge, but also build a strong foundation of practical knowledge they’ll use as they grow into adults. At Clark County Credit Union, we believe college students are perfectly positioned to develop responsible financial habits that will help them achieve their future goals.
How College Students Can Build Credit Responsibly
Understand Student Loans & Repayments
Many men and women take out student loans during their college career, however, some of these individuals do not understand how these loans will impact their credit score. Upon graduating, it’s important each borrower always pays their monthly loan payments on time. Paying on time will positively increase your credit history, but missing a payment will negatively impact your credit score.
Use a Credit Card Responsibly
Not all debt is bad. In fact, a reasonable debt-to-credit ratio can help you build a strong credit history. When using a credit card, don’t max it out. Instead, place a recurring bill, like your car insurance or utility bill, on this card and pay off your balance in full each month.
Don’t Open Too Many Credit Cards
While using one or two credit cards responsibly can help boost your credit score, opening too many credit cards at once can backfire. The key to responsible credit card usage is learning how to manage your available credit and debt. Applying for too much credit at once can drop your score. Typically, using a single credit card on a steady basis will improve your credit in the long run more than using two to three cards sparingly will.
Pay All of Your Bills on Time
Credit card and student loan payments aren’t the only elements of your credit report. Any recurring bills you may have, including utility bills and rent payments, will also impact your credit history. Make sure you always pay your bills on time. In the event you cannot, always reach out to the billing party for assistance prior to the bill’s due date.
Monitor Your Credit Report Often
Imagine trying your hardest to responsibly build your credit report only to discover a fraudulent charge or error years later. By monitoring your credit report on a regular basis, you can identify and dispute any problems you discover. Your bank or credit union may even provide you with an updated credit score each month, making it effortless to keep track of any sudden changes. Be aware, however, that your credit score could be affected if you run it too often.
Never Take on Too Much Debt
Credit cards and loans are fantastic resources that can facilitate your goals. Unfortunately, the temptation to use them irresponsibly can quickly derail your financial plans. You should only borrow what you can responsibly and reasonably pay back. Only use your student loans for essentials, like tuition, supplies and lodging. You should never use your credit card or loan to finance large expenses unless absolutely necessary.
Build Your Credit with Help from Clark County Credit Union
For more help learning how to responsibly build your credit history while in college, contact Clark County Credit Union today at 702-228-2228.