Tips on How to Build Good Credit as a Student

credit for studentBuilding good credit can be difficult for a student going off to college because many times they will have no prior history built up for reference. Good credit can make it easier to rent an apartment or obtain a loan to buy a car in the future. Achieving a high credit rating will take some time but there are some tips that should be kept in mind to make the process easier.

Get some credit

It may seem odd, but in order to get favorable credit a consumer first has to have a credit history. This is not an easy process for a student but it can be done.

Don’t get trapped – While federal regulations have changed the way credit card companies can operate, students still receive many offers that are not in their benefit. Avoid cards offering free prizes for signing up or that use “hard sells.” Don’t sign up for a card that offers unnecessary benefits or has an annual fee.

Open accounts – Ask a parent to assist with opening bank accounts. Use online banking to easily monitor account activity and set up reminders of when payments are due. Paying bills on time will also help improve credit. It is also possible for a student to be added to a parent’s credit card account, which can help improve the student’s score until they are able to set up their own lines of credit.

Is it necessary? – Before simply signing up for a credit card, there are a few questions that should be considered. Anyone thinking about getting a credit card for the first time should ask themselves if they need it, if they can afford it and how it will be used.

What to look for – Find a card with a low annual percentage rate (APR) and no annual fee. Take into consideration what sort of policies the account has toward changing the terms and what the fee for late payments will be.

Other steps to take

Once a credit card account has been opened, maintaining a good rating is dependent on continuing to do the right things.

Pay on time – This applies not only to the credit card balance, but to all bills. Being late on other bills will get reported to credit rating bureaus and eventually lowers the credit score.

Check the report – Be sure to take advantage of federal regulations that allow a customer to review their credit report once every 12 months. Checking the report can bring to light debt the customer didn’t know was there or an error. Correcting an error can increase the credit score.

Use it sparingly – Avoid high-priced purchases that will prevent the total balance from being paid off each month.

Good credit is a necessity of life but achieving it can often be easier said than done. By choosing the right card and using it wisely, financial stability is possible even for a college student just starting out on their own.

About Peter Christopher

Peter Christopher is the Editor to Finance care Guide and a guest columnist for many blogs that deals with financial issues. He has devoted himself to full time speaking, writing and consulting on personal finance management. Visit him on Google Plus and Twitter.

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