The best ways to build credit as a college student are to become an authorized user on a parent’s account and to use your own credit card account responsibly when the time comes. You don’t need to be a certain age to build credit. You can actually do it before getting your own credit card account, which you become eligible for once you turn 18 years old. Being an authorized user can help you establish credit and even build a good score. The primary accountholder just has to pay the bills on time. So if one of your parents will add you as an authorized user on one of their credit card accounts, that’s one way for you to build credit while in college.
Your other option is to get your own account. Student credit cards are designed for applicants with limited or no credit history. So a lack of experience shouldn’t keep you from being approved. You just need enough income (or assets) to pay the minimum monthly bills. Those are usually $10-$15 for students. Student cards often give terms that are much better than other cards for limited credit. That’s because credit card issuers know college students are more likely to have higher incomes after they graduate.
How to build credit as a college student:
Become an authorized user. For fast credit building, without having to apply for your own card, ask a parent or other adult to add you as a user. You’ll share a credit limit with the primary cardholder. Only the primary cardholder is required to pay, but both of you build credit.
Apply for a credit card. If you have no existing credit history, you will probably qualify for a student card with good terms as long as you have an income. But you can also apply for a secured card if you’re worried about approval odds, as secured cards are easiest to get.
Use the card responsibly. The biggest thing to worry about is not overspending. Don’t spend more than you can afford to pay off. And try not to exceed 30% of your credit limit, if possible.
Always pay on time. Missing a due date is very bad for your credit. It’s essential to make at least the required minimum payment on time each month. But paying in full is better, because it means you won’t owe interest.
Monitor your credit and statements closely. Check your credit report for free with WalletHub on a regular basis. Make sure there is no inaccurate information. Go over your credit card statements in depth to make sure there are no purchases that you didn’t authorize.
“Graduate” to better cards. Once you’re out of school, your credit card company may offer to upgrade your card based on the credit history you’ve built. Or, you could simply apply for a second card with better terms.
There are several ways to improve your credit score in 30 days. Reducing your credit utilization is one of the fastest ways to raise your score, and you can do it by paying down debt, spending less, paying your bill more often or asking for a higher spending limit. Disputing negative information on your credit report can help quickly, too. The bottom line is that your credit score can change anytime new information is added to your credit report or old information is added to it. And creditors typically report updated info about your loans and lines of credit at least once a month. So making the right moves for 30 days definitely can produce results for your credit score.… read full answer
But you must understand that true credit building is a multi-year process. You’ll still need to manage your money responsibly moving forward for your credit-score gains to last. And that’s one reason why you should never, ever pay for credit repair. Nonprofit credit counselors can be very helpful, but services that make wild promises and charge fees, especially up front, are best avoided.
Now, with that being said, let’s get back to the business of boosting your credit score by next month. Below, you will find a collection of tips that should help anyone improve their credit score quickly. You can also get personalized advice for how to proceed by checking out your free credit analysis on WalletHub.
Here’s how to improve your credit score in 30 days:
Dispute Credit-Report Mistakes: Removing negative information from your credit report is perhaps the best way to generate substantial short-term credit-score improvement. But you can remove such information only if it’s wrong or the result of fraud. So go over your report with a fine-tooth comb, cross-referencing each item with your own financial records. If you find something fishy, investigate it further and, if necessary, file a dispute with the credit bureau.
Make a Big Debt Payment: How much you owe, especially compared to your income, has a big impact on your credit score because it tells lenders how risky it would be to let you borrow more. A credit score measures your risk to lenders, after all. So the more debt you pay off, the more your score should improve.
Reduce Your Credit Card Statement Balance: Credit utilization is calculated by dividing your credit cards’ balances at the end of each billing period by their spending limits. So if you reduce the balance listed on your monthly statement, you also reduce your utilization, which in turn improves your credit score. You can reduce your statement balances by spending less, making larger payments, or paying your bill more frequently. For example, paying credit card’s bill twice per months – once before your statement is generated and again before the due date – allows you to lower your credit utilization and avoid interest.
Become an Authorized User: If a family member has excellent credit, ask him or her to add you as an authorized user on an existing credit card (preferably an oldest one with a high credit limit and no negative records). This might take too long to process to benefit you in a month’s time. But it should provide a bump pretty quickly.
Dispute Negative Authorized-User Records: Not many people know this, but if you are or were an authorized user on an account that is dragging down your credit score, you can ask the credit bureau to remove it from your credit report. Authorized users are not responsible for paying the bill, which means they don’t have to suffer the consequences of not doing so. You just have to file a dispute.
Ask for a Higher Credit Limit: More available credit will reduce your overall credit utilization ratio, a key component of your credit score. Be careful, though. Many credit-card issuers will re-check your credit history — causing a hard inquiry and short-term credit-score damage — before approving a higher limit. So make sure to ask about your creditor’s policies first. You should also make sure all your credit limits are expressed accurately on your credit reports. If the listed limit is lower than it should be, ask the issuer to report an updated figure to the credit bureaus. Take note, however, that if you have an “NPSL” credit card, there might not be much you can do about an unusually reported credit limit.
Write a Goodwill Letter: If your credit report bears only a minor blemish — one late payment, perhaps — and the rest of your credit history is solid, you can try asking the issuer for a favor. For example, you could call and make a case for why your slip-up should be forgiven and stricken from the record, so to speak. Or you could send an official “Goodwill Adjustment Letter,” which formalizes the request. This tactic is most successful before a negative record actually makes its way to your credit report. But it’s worth a shot afterward as well.
You can keep track of your credit score’s latest developments by signing up for a free WalletHub account. WalletHub is the first and only website to offer free credit scores and full credit reports that are updated on a daily basis. Additional information about increasing your credit score can be found in our comprehensive Credit Improvement Guide.
The best way to use a student credit card is for small everyday purchases that you pay for in full by the due date each month. This will help your credit score improve as well as get you in the habit of paying bills on time and spending only what you can afford to repay. Only using a portion of your credit line – less than 30% is ideal – will also help your credit score. And it will leave you with enough available credit left over for potential emergencies, which is a key reason for students to have a credit card.… read full answer
But that’s not the only way to use a credit card as a college student. In fact, you don’t even need to use your card to benefit, as long as you have one. You can learn more that option and other tips for how to make use of student credit cards below.
Best Ways to Use a Student Credit Card:
Make Everyday Purchases & Pay On Time: There’s nothing wrong with regularly making purchases with your student credit card, as long as you always pay your bill on time and in full. You don’t want to waste money on interest or get into the habit of spending more than you can afford to repay. And missed payments are the most common reason for credit score damage.
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