Building credit can be hard, especially when you are in college. With little credit history, it can make it hard to buy a car or purchase your first house without a good credit score. Luckily, there are ways that you can start building your credit now so that you won't run into these problems in the future.
1. Get a Credit Card
The key to getting a credit card is to make sure that you use it responsibly. Don't spend more than what you can pay off at the end of each month. There are tons of credit card companies that offer special cards just for students, so do your research before deciding on a card. Again, be responsible when using your card to avoid credit issues.
2. Pay Student Loans Early
Many students have to take out student loans at some point during their time in college to pay for their education. While some loans don't require payment until after you graduate, there is no penalty if you make payments while you are still in school. Even if you can't pay much, the smallest amount will come off your principal balance and help raise your credit score before you are required to start making payments.
3. Pay Bills on Time
If you have to pay for some kind of bill (phone, car, utilities), make sure that you are paying on time, or even better, early. Each of these bills can add up over time and affect your overall credit score. By consistently paying on time, you are proving that you are responsible and reliable and over time, this will help raise your score.
4. Pay More than the Minimum
If possible, when paying your bills, try to pay more than the minimum balance for each period. This will pay off in the long run, because you will owe less at the end, and this is another way that you can prove that you are responsible and reliable. It may be hard at first, but once you see those numbers go down, you will be surprised how fast you can pay your debts off.
5. Don't Cosign for Friends
Similar to having a parent cosign for you, your friends might ask you to cosign for them, but no matter how much you love your friends, do not do it. If they fail to make payments or are constantly late, this can negatively affect your own credit score. Even if you think you trust your friends to be responsible, don't risk it.
6. Track Your Score
You are allowed a free credit report from each of the three credit bureaus once a year. Some credit card companies offer free ways to check or monitor your score so you can see how you are doing. By checking your score, you can make sure that it is only increasing and see the ways that your good habits are helping you out!
Don't wait until after you graduate to start building your credit. There are small ways that you can begin to work towards that perfect score before you even think of buying a new car or your first house. Before you know it, you will have a perfect 850.