How to Help College Students Build Credit

The economy has suffered over the last decade, making it harder to qualify for a loan, and the need for a good credit rating more important than ever. Smart young people will get started early building a solid credit history during their high school and college years, so that when they move out into the world on their own, they’re financially ready to handle whatever may come their way.

Below are 8 practical tips to help college students build credit:

1. Open a savings and checking account.

This can be done as early as childhood, but should definitely be in place by high school so teenagers can start learning how to save and manage money before college. Maintaining a checking account establishes a history of financial responsibility that looks great on future credit reports.

2. Get to work.

Even if you’re fortunate enough to have parental support, grants, or are using financial aid to pay for tuition, rent and bills throughout college, it’s important to get a job and start creating a work history. The process of putting a paycheck into your bank and withdrawing money helps to create a financial existence for you. It also shows that you are willing to earn money as well as spend it.

3. Put bills in your name and pay them.

Even if you’re being funded by your folks, be sure to put at least one utility bill in your name and pay it in a timely manner with the checking account. This shows creditors you can be trusted to pay debts and creates a solid background for future credit checks. Parents can also help start this paper trail early by putting one of the family’s home utility bills in their child’s name during high school.

4. Get a store credit card.

Sometimes a smaller department store credit card or gasoline card can be easier to qualify for than a one of the majors. Start small, making only purchases you can afford to pay back every month, and work your way up.

5. Get a prepaid bank credit card.

The bank with which someone has checking and savings accounts will usually issue a prepaid credit card, which means customers give them a deposit of a certain amount, and make purchases no larger than that. Use the card, and make the payments in full and on time.

6. Get a joint credit card with parents.

If your parents have good credit, adding your name to their existing credit card can help raise your score by proxy, effectively “piggybacking” your credit rating up with theirs. Credit agencies will report card activities in all listed names, giving the student a credit history they wouldn’t have had otherwise.

7. Establish a consistent credit card payment history, and then get your own credit card.

Finally! Your own big name credit card! They don’t give these out as easily as they used to, with “having no credit history” now being almost as negative as having bad credit. But if you’ve followed the above steps and worked your way up, you should be able to qualify for a Visa, MasterCard, Discover or American Express credit card.

8. Use all credit cards responsibly.

The most important step of all, this means that you shouldn’t ever spend money you can’t immediately pay back. Credit cards should only be used to build your credit history and score, not to purchase things you can’t actually afford. Many newly-approved-for-credit young people fall into the tempting trap of instant gratification, charging more than they can afford to pay back until the interest causes debt to grow beyond manageable monthly payments. This problem will obviously defeat the entire purpose of owning a credit card by lowering your score, so don’t fall for it.

It’s never too early to start thinking about your financial future, and taking the steps to build a great credit rating is one of the best ways to start your life off on the right path. Be sure to pay all bills on time—not just credit card-related debts—and use the tips above to start creating an excellent credit record.

Carol Ammon is a professional blogger that provides financial information and advice to consumers and businesses. She writes for

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