5 Ways to Start Building Good Credit While in College

Your credit score is a reflection of how you handle money. Red flags in your personal credit history could scare way lenders. A higher credit score, on the other hand, can qualify you for a loan with lower interest rates. Creating a better credit score takes time. You can start early while in college to safeguard your financial future.

Start Paying your Student Debt Early

The longer you wait to pay your student loan debts, the more interest they accrue. You can start repaying your college student debt while still in school. It will earn you extra points, as it demonstrates a zest for timely repayment of debts. Consider getting a part-time job or gig just for that purpose.

Maintain Precise Records of Your Repayments

Keep accurate records of your student loan repayments and other credit details. Only communicate in writing when talking to your lenders. It is not infrequent for individuals to get inaccurate credit reports when applying for a mortgage or other loans. Armed with the right information, you could seek to have your credit report rectified swiftly, should that happen.

Get a Credit Card

No credit is not good credit. Your future lenders would want to see evidence that you used credit, and repaid successfully. To get a high credit score, therefore, get a credit card that you can use for small purchases. Charge an amount that you are sure to repay in full each month. This will start to build a good credit track record. Just ensure that the issuer of your card reports your usage to the credit bureau, so that it can feature in your credit history.

Use Credit Responsibly

You will have to overcome all temptations to max out your credit cards. A rule of thumb is not to use more than 15 % of the available credit. Then again, remember to repay all your balances in time.

Paying your debt in time shows that you are a reliable borrower. Experts also advise not to open multiple credit accounts at the same time; it is a red flag denoting people with short credit histories.

Pay Your Rent and Other Utilities on Time

In the past, only your credit could affect your credit score. That has long changed. Credit bureaus have developed an alternative credit score for no-file people, a category that includes students.

Under this, you can gain or lose credibility with your utility payment habits. The credit bureaus will also list your rental payments in credit reports. You just have to find an apartment where the landlord reports this information.

Maintaining a good credit history is a no-brainer, but it takes work. The above tips might help you achieve a higher credit score to qualify for favorable loans when you graduate.

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