Financial Fundamentals Blog

4 Ways to Build Your Credit as a College Student

A person surrounded by schoolbooks and researching how to build credit as a college student on her phone


Building a strong credit history is important, and it’s never too early to start. A credit score will carry a lot of weight for certain milestones in the future, such as getting your own apartment, house, auto loan and even other student loans or student debt consolidation.


Right now, you may think that credit cards and debt are bad. However, not all debt is bad, and it’s essential to building a healthy credit score and financial wellness as long as you take the right steps. 


Let’s dig into the essential information you need about how to build credit as a college student and make smart financial decisions early.


What Is Credit?

Credit allows you to borrow money upfront with the understanding that you’ll repay the borrowed amount, often with interest, in the future. Lenders and creditors look at your credit history, which is your record of borrowing and repaying money, to determine whether or not to give you credit. 


Your credit score shows how trustworthy you are to pay back the amount you borrowed. The higher your credit score is, the more favorable your interest rates, repayment options and even credit approvals will be in the future. 


Your credit score will be checked for a number of things — credit cards, loans, mortgages and even when you’re renting an apartment to make sure that you’re able to financially handle the amount of additional debt that you’ll be taking on. Without a credit history, you’ll find that these milestones become more difficult, so it’s important to take steps toward building a healthy credit score early. 


Credit scores are calculated by a specific formula that isn’t shared. However, the factors that go into the calculation include:

  • Paying your bills on time
  • How much debt you have
  • How long you’ve had different types of credit
  • New inquiries on your credit
  • A mix of different types of credit

How to Build Credit as a College Student

Building your credit early will give you a longer credit history, which can result in a healthier credit score. Let’s take a closer look at how to build your credit score as a college student.


Evaluate if You Need Student Loans

Private student loans often require a credit check — this can be very difficult when you don’t have a credit history. However, many federal student loans don’t require credit checks. A federal student loan can help you with both paying for college and building a credit history, especially if you decide to pay on your loans while in college.


Be an Authorized User on a Family Credit Card

If your family has credit cards, you may be able to become an authorized user on them, which means you can use their credit card in your name as though it was your own credit card. Most credit card issuers provide account activity reports to all authorized users credit reports. 


This can be very beneficial for you if both you and the cardholder manage the credit card responsibly. However, be aware that if the primary cardholder is carrying a large balance on the card or misses a payment, it can also negatively impact your credit score.


Apply for Your Own Credit Card

Once you’re able to open your own credit card, there are a couple of options you have. You can apply for a regular credit card, or if you don’t qualify for one of the various types of credit cards available, you may be able to apply for a student credit card


A student credit card is specially designed for students who have little to no credit. These credit cards may have a higher interest rate and lower credit limit. Keep in mind, it’s important to not take on more debt than you can repay.


Make On-Time Payments

Paying your bills on time is one of the most important factors that factors into a credit score calculation. Whether you have your own credit card or are paying your student loans while you’re in college, making your payments each month or even paying your balance off in full if you have a credit card will go a long way toward building a healthy credit score.


Build Your Credit Score as a College Student

Determining how to build your credit as a college student can be overwhelming, but there are simple steps that you can take to get ahead and start building your credit score early. 


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