5 Ways for Students to Build and Maintain Good Credit
When you are in college, money can be incredibly tight. Most of your capital is going to tuition, books, living expenses and more. However, just because you are tight on cash, it doesn’t mean that you shouldn’t focus on building your credit. Indeed, good credit will not only help you stay liquid in college – it will also help you later on – when you are out of college and looking for apartments, or even a house. The truth is that there are a number of ways for students to build good credit, because building credit is sometimes the most important part of maintaining it. Here are five ways for students to build and maintain good credit.
- Pay attention to your credit report. When it comes down to it, your credit report will be like the Holy Grail of your credit history. When you apply for an apartment, the landlord may look at your report and your score. If there are any discrepancies, you want them to be taken care of right away. If you have debts, you want to set up a plan to pay those debts back. You can use applications like Credit Sesame to review your credit report.
- Start small – with a low maximum credit card. One of the best ways to build credit is to apply for a low risk, low maximum credit card. These credit cards don’t let you spend a lot of money and they don’t have high interest rates. When you have one of these credit cards, you want to be sure that you remain frugal and responsible and you want to only put charges on the card that go towards credit building.
- Always pay your credit card bills on time. When you have a credit card, you always want to pay your bill on time. If you are consistently late on paying your credit card bills, you could have a major issue with your credit. Ideally, you want to pay your bill at the end of every single month. The moment that you go over is the moment that your credit starts to become docked. If you feel like you are getting behind, you may want to give your credit cards a break.
- Budget accordingly – you never want to spend beyond your means. Another thing that is important to remember when you have a credit card is that you need to budget. It can be hard to know how much you should spend if you don’t have a budget. This is why you want to create a line-by-line budget that details your income against all of your expenses – this will help you stay within your budget and not overspend.
- Pay back all debts. On top of everything, you also want to be sure that you pay back all outstanding debts. These debts are most likely eating away at your credit score and it will only get worse with time. When it comes down to it, if you don’t have the money to pay back these debts, you may have to devise a payment plan. In the end, you want to do anything you can to pay back all debts.