3 Ways to Build Credit as a College Student

by Maurie Backman | Updated July 21, 2021 - First published on March 9, 2020

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It's possible to build credit during your studies. Here's how.

When we think of college students, it's easy to picture young adults dressed in sweatpants who stay up late cramming for exams while feasting on instant noodles and leftover dining hall scraps because that's all their budgets allow. In fact, a large number of college students are perpetually cash-strapped due to the fact that they're not only without an income, but spending money they don't have to cover their tuition costs. 

Therefore, it’s easy to assume that college students are destined to have poor credit -- especially those who don't hold down a job during their studies. But actually, it is possible to build credit as a college student, and there are several good reasons to do so.

First of all, the higher your credit score when you graduate, the easier it'll be to rent a home, qualify for an auto loan, or get approved for a new credit card. And these things are important when you're trying to establish yourself as a functional adult. Secondly, depending on the professional field you're hoping to break into, having good credit could help you land a job. So it pays to make an effort to build credit while you're a student. Here are a few ways to go about it. 

1. Get some bills in your own name, and pay them on time

It may be the case that your parents are covering your living expenses while you're in school so that you can focus on academics. But instead of having your parents pay every bill, take over one or two yourself. For example, put your cell phone bill in your name and use the money you have in your savings account to pay it. Or ask your parents for the money to pay the bill yourself -- it really doesn't matter where the funds come from as long as those bill payments are recorded under your name and made in a timely manner.

2. Open a credit card and pay your monthly bills in full

It's not always possible to qualify for your own credit card as a student, but if you are approved, paying your bills in full every month is a great way to establish a healthy credit score. One big factor that goes into calculating your score is credit utilization, or the percentage of available credit you use at once. A utilization rate of 30% or lower will help your score, so if you have a credit card with a $1,000 limit, but you pay it in full every month, your utilization will be an excellent 0%. 

3. Become an authorized user on someone else's credit card

If you can't get approved for your own credit card during college, another good bet is to have someone -- say, a parent or older sibling -- add you as an authorized user on their existing account. How will that help you? Usually, when the primary cardholder makes payments on time, that good behavior is added not only to their credit record, but to yours as well. That means you can effectively sit back and piggyback on someone else's good credit habits. But be careful about whose account you get added to -- an older sibling who tends to be financially irresponsible is not a good bet. If they're late with those credit card payments, that behavior could have a negative impact on your score.

The better your credit is when you graduate college, the easier it'll be to navigate life in the real world. Take these steps, and with any luck, you'll graduate not just with honors, but with a credit score you can be proud of.

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