Building a Great Credit History In College
By: Larry Goldberg
If you’ve just applied for your first student credit card, you’re on your way to building a great credit history while you’re just a student. Having that credit history in your pocket when you graduate could mean that you receive great home loans, ideal auto loans, and great interest rates everywhere you apply for credit. However, just because you’ve applied for a new student card doesn’t mean your guaranteed a great credit rating. There are several steps you should take while you’re in college to assure yourself the credit rating of your dreams.
You’ve already taken the first step to a good credit rating – applying for your first student credit card. One of the rules of having credit is that it takes credit to build credit, and you can do that through proper use of your student card. As long as you continually make purchases and repay them, you’ll be creating a nice credit history for any interested lender.
The second step to building the perfect credit history to carry you through life is to make all of your bill payments on time. While this certainly applies to your new student credit card, it also applies to your utility payments, as well as any bills you might incur with the city. Utility companies and municipalities can create entries on your credit report should you fail to pay so much as a parking ticket, and future lenders won’t look kindly on entries like these.
Never, never exceed the credit limit on your new student credit card. Pay attention to your balance as much as possible, because should you go over that balance by a single dollar, it will be recorded on your credit report, and you’ll have to pay the associated fees to your credit card company. Moreover, try to keep your balance at just 35% of your credit limit. It will look better to any potential lenders who view your report.
Check your credit report at least every six months. You’re entitled to one free credit report a year, and some services will let you pay a small fee to get one from each credit bureau every six months. This allows you to review it for accuracy. Thousands of people have errors on their credit reports, and it can take time to resolve these errors. However, checking on a regular basis will ensure that you’re not only familiar with your report, but you can also keep abreast of any problem developments.
Get a good checking and savings account. These function as a signal to lenders that you’re a participant in the financial world as a whole. A bank account also lets them know that you have a way to pay the bills on the accounts that you open.
If your first student credit card is on its way, take some time to review these steps so that by the time you graduate, you’ll have a credit history to be proud of.
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