Start Building Great Credit During College

Dec 14, 2016 by

There is a stereotype that exists about college students not being great with money. Whether or not this is true for you personally, there are definitely plenty of college students who don’t have the best finances. It’s not always an issue of poor spending and saving – college costs and lot of money and most college students don’t have time to earn much in the way of income. College life is challenging, and not just in the realm of finances. This doesn’t mean, though, that you can’t build a strong financial life while in college. One of the best places to start is an arena of personal finance that doesn’t require much money: personal credit.

If you have student loans taken out in your name, you already have a basis for building credit. At this point you may have other credit building mechanisms in place as well, like one or more credit cards, or utilities that are in your name. If you don’t have any of these, it’s time to get one or more, even if it is just a single credit card that you rarely use. Credit history starts when you borrow money for one purpose or another, then pay it back. So first thing’s first, find credit building exercises that you can handle: take out a reasonable student loan at a good interest rate, ask your bank for a credit building credit card (then don’t use it much, or at all), or have the utilities put in your name at the rental you share with your friends.

Maybe you’ve already achieved this step in personal credit building. If so, your credit probably just needs some housekeeping. It’s not uncommon for students in the early days of their credit life to have some mistakes recorded on their credit report. If you’ve never checked your credit report, check your credit report now. Take note of what you see.

Almost every credit report has a few negative items recorded on it. These could represent a lot of events from your life, some as simple as having forgotten to return a rental for two weeks after the deadline. Negative items on your credit report are basically times you screwed up with borrowed money. If you forgot to pay off the minimum balance on your credit card for three weeks last year, you’ll likely see this and similar items on your credit report. If you have an account that has been sent to collections, you’ll definitely see this on the credit report, and you can bet that it will be weighing down your credit score.

With information on removing collections from your credit report, you can learn about removing negative items from your credit history. If you do this simple pruning of your credit report (through a simple dispute process, or other methods) you’ll start to see your credit history improve and your credit score rise. If you practice this and the other methods mentioned above, you’ll start to find that your college years are a time that can actually be good for your personal credit!

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1 Comment

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    Nice and informative article. This article helps me. Keep doing this.

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