Tuesday, October 20, 2009
How to Build Your Credit Score in College
Posted by Mary Clare McGraw
First, a good way to get started is to open a checking and savings account. If you are going to take out a small loan, while still in college, try to co-sign on the loan with someone who has great credit. You basically get to piggyback on their good credit. The thinking is that if someone with great credit is willing to cosign with you, and you pay your bills on time each month, you’re probably very credit worthy. It’s like getting someone to vouch for you. It’s an excellent way to build credit extremely fast. You can try a student credit card but make sure to be careful about the card you sign up for. Don’t take a credit card offer that you get in the mail because they can charge as high as 21% interest! Signing up for a store credit card at your favorite store could be a way to ease into building your credit by only having to pay a bill when you shop at that one store. It minimizes the amount of bills you will have to deal with at first and it is more difficult to rack up a large amount of debt at one store than at various stores you may shop at in one day even. Getting a loan is a good way to build credit in college, even if it is subsidized and there is a grace period until after you graduate. Lastly, if you have a credit card, be sure to use it every month but try not to charge more than 30% of your credit limit. Keeping your balance below this amount shows creditors that you are responsible with credit and are not very likely to overextend yourself financially.