College is one of the first times when young people are asked to start thinking about their futures. It is a time when they choose their future profession, and it is also a time when their names start appearing as credit reports with the various credit reporting agencies. There are tips that every college student should follow to build a strong credit history and a solid financial foundation for their future.
Minimize Accounts
Some college students are given the opportunity to access credit for the first time in their lives. Unfortunately, the novelty of having access to credit can have effects for many years after school is out. Carrying a large amount of credit when you have a limited income, as many college students do, can have a negative effect on your credit history. Collecting department store and Internet retail credit accounts is not going to help your credit while you are in school.
Payments
Always make your credit account payments on time every month. You can increase your chances of having your payment applied to your account on time by using the online payment option. But some online payments can still take two or three business days to post. Contact your creditor to find out the best way to make sure your payment is on time. If you cannot make a payment on time, then let your creditor know in advance and ask if they can mark the payment as on time. Starting a history of late payments while you are in college will hurt your chances of getting a car loan, mortgage or other credit when you graduate.
Use
When you use a credit card, only spend as much as you can afford to pay back. Paying your balance off each month while you have the limited income of a college student shows a high level of responsibility. This will translate into higher credit scores as you get closer to graduation.
Savings and Checking Accounts
A savings account shows the ability to plan your finances and set aside money for future needs, according to the FDIC website. Having a savings and checking account while you are in college is an excellent way to help boost your credit history and show fiscal responsibility to creditors after you graduate. Keep some sort of balance in your checking account, and try to add to it as often as possible. Even a regular schedule of $5 deposits will help improve your credit.
Employment
Having some sort of job while you are in college can at least give creditors some source for your credit account payments. Holding down a job while taking on credit cards during your school years establishes a history of income associated with credit card payments.
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