How to Build Credit in College in 5 Steps

July 24, 2020

How to Build Credit in College in 5 StepsCollege is a time of change and growth for students everywhere. Many students may find themselves experiencing financial freedom and autonomy for the first time. While college is a prime time for meeting new people, exploring new things, and having fun, it's also a great opportunity to build your credit score. For those without a credit history, applying for a credit card is one of the easiest and quickest ways to build credit.

Credit cards are also helpful when paying for everyday expenses and necessities. Whether it’s a quick morning coffee or lunch with a friend, having a credit card often comes in handy. They can be especially beneficial for students in college when it comes time to buy textbooks and other school supplies.

The sooner you start building your credit, the better. When you begin building credit early, you give yourself more time to work on building a good credit score. You may be thinking, "I'm in college. How do I start building credit?" Here is how you can build good credit in 5 easy steps:


1. Learn about credit and credit cards

In order to build good credit, you first need to understand credit and everything that comes with it. A good place to start is learning credit card terminology, with an emphasis on credit history, credit reports, and credit scores. You should also be sure you know about credit cards and how they work.

One of the most important things to know about credit is that in order to get good credit, you must be responsible. Make sure that you are ready for the responsibility of a credit card and are able to hold yourself accountable for your purchases. 

If you aren’t ready to open your own credit card account yet, consider alternatives. For example, you could become an authorized user of your parent or guardian’s card. You could also take out a credit builder loan.


2. Research and open an account

When it comes time to open a credit card account, there will be a wide variety of credit cards to choose from. Each credit card differs in some way, whether it is the benefits, eligibility, or other factors. Some cards are made to benefit a specific purchase or person, such as student credit cards and travel cards. It’s important that you conduct research before you open an account.

College students are often encouraged to open a credit card account if they are of age and have the resources needed. A credit card can offer a college student much more than an easy way to pay for school supplies. They can also offer financial security, bring peace of mind, and help students establish responsible and strong financial habits. 

When you begin to look for your future credit card, make sure you take your time and find a card that works best for you. Talk to your parents for advice. Allow them to help you research and figure out which card is the right choice.


3. Practice good credit habits

Once you’ve opened a credit card account, always be practicing good credit habits. Good credit habits are the key to building a good credit score, but that’s not their only benefit. Practicing good credit habits is also a good way to show your credit issuer that you know how to be a responsible cardholder, and they may increase your line of credit or provide specialized offers.

First and foremost, don’t treat your newly acquired credit limit as an extension to your bank account. It’s important that you are disciplined with your budget and that you don’t spend money you don’t have. In order to keep your balance manageable, it’s a good idea to start by only using your card for small purchases. When you decide to use your card for larger buys, be sure to prioritize your debt and loans above frivolous spending.

On top of regulating and keeping up with your purchases, you also need to be working on building a solid payment history as well. It is vital that when you pay your credit card bill, you pay on time and in full every month. Doing this will help you manage your debt-to-income ratio, build your credit, and establish good habits.


Woman making an online purchase using a credit card4. Avoid credit mistakes

When it comes to being a credit cardholder, avoiding mistakes plays a huge role in determining your credit score. In fact, avoiding credit mistakes is just as important as practicing good credit habits. When using your credit card, do your best to be aware of and avoid financial mistakes

One of the most common misconceptions about credit cards is that you must carry a balance in order to build credit. You do not have to carry a balance on your credit card in order to build credit, and carrying a balance from time to time won’t greatly hurt your credit either. Still, you shouldn’t let your balance get out of hand, and you should try your best to never max out your credit limit. Remember, the goal is pay off your balance on time and in full every month.

Steer clear from applying for multiple cards within a short time period. Although having and managing multiple credit cards responsibly can improve your credit in the long run, applying to multiple accounts before you have a positive credit history will result in application denials, excess hard inquiries on your credit report, and potentially a score decrease.


5. Keep an eye on your account

Regardless of where you are in your credit journey, you should always be keeping a close eye on your account(s). Luckily, monitoring your account on your own is fairly easy when using resources such as a credit card issuer’s website or mobile app to view recent transactions and monthly statements. 

You should always double check statements to make sure everything is normal. Be sure to look into any unfamiliar transactions, no matter how small they may be. Unauthorized purchases can come in any amount. If your card is lost or stolen, notify your issuer right away.

Identity theft and fraud can affect anyone, even those who are extra careful with their card. Make sure you’re taking steps to protect yourself.


What are other ways I can build my credit in college?

Building good credit without a credit card isn’t impossible. In fact, there are many other ways to build your credit. Here are a few ways young adults can start their credit building journey.

Get a credit builder loan

Credit builder loans are loans granted to individuals in order to build the borrower's credit. Unlike personal loans, credit builder loans are offered to people who have no credit or bad credit. 

Report payments

There are various different services that report monthly expenses like utilities and rent payments to credit bureaus. Reporting payments can help credit because it can show a positive payment history. 

Become an authorized user

Being an authorized user of a parent or guardian’s credit card gives you access to the account holder’s card and credit line. If positive, the account’s behavior can begin to help grow your credit. Although, if the main cardholder fails to make payments, your credit will also be impacted.


Having a good credit score is a vital factor for many important things in your life. Building credit in college will help set you up for a strong financial future. It can benefit you when you’re purchasing a car, buying a house, applying for a loan, and much more. It’s important that when the time comes, you take building credit seriously. Getting a credit card in college can help you achieve good credit and build solid money habits.


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