CCCU BLOG

Building credit as a student can seem impossible. While you may not be able to shell out for big purchases, all those ramen noodles and books can help you make a positive impact on your credit score if you know how to use them. In our blog, we’ll explain the best ways to build credit while in college, as well as some do’s and don’ts that will help you stay on the right track and build credit throughout the time you’re a student.
 
Why build credit as a student?
Your credit score (commonly referred to as credit) is a representation of your trustworthiness as a borrower. Credit isn’t just about credit cards. While many think of their credit score and credit cards as ways to make purchases on a day-to-day basis, almost all big purchases, apartments, and more require a credit check. While you may think your debit card is doing it for you, with a credit card you’ll be able to make those same purchases you do every day, while making that money work in your favor by raising your credit score. As you move through life, whether it’s applying for an auto loan to buy a car after graduation, or eventually moving towards purchasing a home or condo, you’ll want to have great credit to back you up and help secure you lower interest rates.

How can I build credit as a student?
If you have a checking account, you are already on the right track. By adding a credit card and making payments from it every month, and treating your credit card like a debit card, you’ll be building credit in no time. It’s easy to get overwhelmed but by setting a budget, using a simple card, and paying your balance off in full every month, you can start raising your score. You can also become an authorized user of your parent’s credit cards, to help build your credit before you have one of your own if that isn’t an option. If they have good credit, this is a great way to gain points.
 
Paying your bills on time, and regularly checking your credit score are additional ways for you to ensure you are on the right track towards having a great credit score in your future. It takes time to build up credit, but five years from now you’ll thank yourself for having gotten started off on the right foot.
 
The do’s and don’ts of credit cards for students:
DO:

• Pay off your card in full every month. Treat your credit card like a debit card, and you’ll be seeing those 760+ scores in no time.
• Use your card for purchases you’d be making no matter what. It’s free points!
• Ask for a credit line increase. It’ll help boost your credit--especially if you still pay everything off every month. You don’t have to use it to get the benefits for your score.
• Choose a card that’s right for your needs. Frequent travelers will benefit from a different card than those who are more likely buying textbooks.
• Consider a different kind of card if you don’t qualify for a traditional credit card. A secured credit card can help you get started before you are able to qualify for a traditional credit card.

DON'T:

• Pay your balance off late. It’ll rack up fees and hurt your score.
• Open too many accounts at once. This can lower your score.
• Close your credit cards accounts. The older your accounts are, the more they can help you.
• Let your balance grow. Carrying debt will hurt your credit, not help it.
• Stop using your card. It has to be used to help you.

Credit is an essential part of being an adult and functioning in the United States. We’re excited for you to start on your financial journey, and believe that you can make the most of what you have to build a great score and protect your financial future while you’re in school.

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