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How to Build Good Credit as a Student?

College is the best time. College students have all kinds of freedom. They can live away from their homes if they wish to, always up for fun and get invited to house parties to enjoy binge drinking with their pals.

College is also the best time to build a good credit. Improving credit score is the quickest way to get financed. A good credit will pay you off for the rest of your life. So, the earlier you start building it, the better.

The advantages of good credit are so many that it’s difficult to list all of them down. A good credit can make it easy for you to rent a condo apartment or get a loan to buy a fancy car. Here are some handy tips to help you build a decent credit:

Open a bank account

What’s puzzling is you need credit to build credit. Sort of chicken and egg stuff. It’s puzzling no doubt, but not perplexing. Not having a credit history works in your favor. That means your slate is clean. All you need to do is open a bank account, that’s it. Doesn’t matter whether it’s a checking or savings account.

Next, you need to diligently maintain the account balance. Opening an account means getting credit, but good credit only comes as a reward for maintaining the account.

It sounds so easy, doesn’t it? In truth, it is easy if you don’t have a bad press because of poor credit history. And if you are carrying the baggage of bad credit, the remedial steps are –

Finding a co-signer

Find someone who is reliable and has good credit. He can be a family member or a close friend. Request them to co-sign a loan issued in your name. When someone with good credit co-signs a loan or declares you as a co-holder of their credit card, their good credit passed on to you and offsets the negative impact of the bad credit you incurred in the past.

There’s a caveat, though. While riding on someone else’s back is convenient, the person carrying your weight may end up with sore back and shoulders. You don’t want that, do you? When someone else is transferring their good credit to you, it’s your responsibility not to default. Or else, the person would be in debt. This could be a sticky situation and to not let it arise, you should become an authorized user. Authorized users remain under the purview of their parents. However, that’s possible only if you are a teenager.

Get new credit card

For college students, getting a new credit card is easy. Of course it’s not assured and several factors are at play. But when young people, especially teens apply for credit card, lenders assume their parents will come for their rescue if they ever find themselves in the thick of debt. And so, they accept their request.

If you don’t get credit card this way, no problem. You can still get a secured card. All you need to do is deposit money to your bank account. Your friends or parents can borrow you. The amount of your deposit and that of your credit limit will be the same. Banks will unhesitatingly issue you a card as you will keep money in their escrow as security.

After getting the card

Getting a card may be difficult, but not as difficult as maintaining one. Using the credit card in a frugal way is incredibly challenging. Resisting the temptation to max out credit limit is hard. Most people easily succumb to this temptation. It’s hardly surprising that the US consumer debt has reached a staggering $13 trillion.

Prudent use of the card comes with a checklist, which includes:

  • Not using more than 30% of your credit limit.
  • Staying away from big purchases.
  • No overdue balance.
  • Pay your electricity and telephone bills on time.
  • Don’t apply for loans if you haven’t paid off the previous ones.
  • If you have taken a loan, pay the interest on time.

In short, play by the rules and don’t irk the lender. If you can follow all the said pro tips, not only you’ll have a shining credit report, but learn tons of valuable lessons on saving.

Utilize student loan

There’s no dearth of tips on how to secure student loan. Very few, however, offer tips on how to correctly utilize it. A whole lot of students take out loan to spend on non-educational items. This is a surefire way to ruin good credit. Never do that. Always spend the money on educational purposes.

Credit bureaus have their hawk eyes open and they can see what you are doing with the borrowed money. Your credit report will reveal to them all the purchases you’ve made with the loan amount. If they find out you’ve used up the money for purposes other than education, they’ll lower your credit score. In fact, the presence of unknown items on your credit report can make it difficult for you to get a loan.


Students have golden opportunities to build excellent credit. It’s extravagance and spunkiness that stop them from doing so. They must act wisely and in a matured way. The tips discussed can help them with requisite insights. But the implementation part solely rests with them.

Peter Christopher

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