How To Build Up Your Credit Score As A Student, How to make your credit score as a student, How to grow your credit score as a student

Part of our mission here at StuCred is to educate our customers on the importance of credit scores and what it means to have a good or bad credit score. But to put it shortly, a credit score can decide whether you’re able to buy a car, a house or even rent an apartment later on in life. Many students aren’t currently aware of their own credit scores and the implication it will have on their lives. However, this is slowly changing as more money-lending services are being made available to students which have also led to the increased awareness of CIBIL scores and credit among students as well. But it is apparent that many students are still unaware of the things that they can do to improve their credit scores and as a result, have no idea where to start when it comes to building them up. If you’re someone looking to start building up your credit score as early as possible, here are a few tips for you:

  1. Become an authorized user on a family member’s account: If your parents already have good credit scores, it is possible to boost your own credit scores by asking them to add you as an authorized user on their own bank accounts. The same goes for any family member with the same last name as yours. This method is known as “piggybacking” and is considered controversial by many experts in the credit industry but has seen no legal arbitration yet. Regardless, we still do believe its a great way to get started on building your credit score.

 

2. Apply for your own credit card: In the past, banks were clamouring to get a credit card into the hands of college students due to the fact that college students were slightly less educated on the issue of credit scores and were often seen as gullible targets by them. However, these banks did not consider the fact that students are often unable to pay their credit card bills and as a result, shifted their focus to marketing debit cards to students. This does not mean that banks will not issue you a credit card; it just means that the scrutiny on you when applying for one will be higher. As long as you’re a beneficiary of an account belonging to a family member with a good credit score, this shouldn’t be a major issue. With this being said, it is important to note that abusing your credit card is a possibility and you should always take caution when using your credit card.

 

3. Pay revolving debt over installment debt: Revolving debt is essentially what you incur when using a credit card. Prioritise paying off your credit card bills over student loan installments or rent bills as the interest on your credit card bill can accrue much faster. To maintain a good credit score, your credit card utilization should be 30% or lower of your total limit as well. So if you ever find yourself spending over this limit, make sure to cut down on your expenses until you’ve reached the 30% mark. However, sometimes your essential expenses may incur more than this limit which brings us to our next point.

 

4. Apply for a higher credit limit: Your eligibility for a higher credit limit is largely dependent on whether you’ve been paying off your credit card bills regularly. As time passes on, your credit score will improve as long as you’ve been making your payments duly as well as if you’ve been maintaining your credit card spending under the limit of 30%. We do recommend that you apply for a higher credit limit on your credit card once your score improves as it will become easier to stick to the 30% rule. However, we should also note that if you are already struggling to make your existing credit card payments, a larger credit limit may not be the best choice for you.

 

5. Pay rent with your credit card: The more positive payments you have on your credit card, the better your credit score will get. Paying off your rent with your credit card will add a positive payment on your credit history as long as you duly pay it off yourself when the amount is reflected on your credit card bill. This amount should be paid off before the billing period of your credit card though as rent paid with your credit card can accrue interest as well which will reflect poorly on your credit score. We should also mention that this option may not always be available as some landlords may not be comfortable with accepting credit cards as a mode of payment.

 

6. Review your credit score regularly: As per the law, every individual is allowed to get one free credit report from one of the three major credit companies every year. Make it a habit to check your credit report at every opportunity as errors on these documents are more common than you think. Most errors that have been reported to these credit bureaus are usually pertaining to incorrect information such as a misspelled name, wrong birth date or sometimes even being accidentally declared as deceased. Imagine trying to apply for a loan if your credit file says that you’re dead; that’s just a headache no one wants to deal with.

Though trying to maintain a good credit score in college can be quite difficult and may not have any immediate benefits, having a good credit score opens up a lot of opportunities, especially when you are establishing your career and your future in general. We hope you learned a thing or two about how to maintain a good credit score. Thanks for reading!

Did you know that even StuCred can help you improve your credit score? Get the app here:
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Tags- How To Build Up Your Credit Score As A Student, How to make your credit score as a student, How to grow your credit score as a student