Don't Wait: Build Credit Today

Have you ever wondered why we offer a credit card specifically for college students? It's because college is the perfect time to start building your credit history. Using credit responsibly now creates the building blocks for financial success in the future.

Why is Building Credit Important?

Your credit history is a record of your borrowing and repayment behavior. Your credit report lists all of your personal information, debts and payment habits. Your credit score is a numerical representation of the likelihood that you'll pay your loans back on time, based upon your past behaviors listed on your credit report. Your credit stays with you for your entire life, so establishing good credit early on can lead to many opportunities.

Financial institutions check your credit history when you apply for loans and credit cards to determine if you qualify and what interest rate you'll receive. Landlords check your credit to gauge the likelihood that you'll be a responsible tenant. Insurance companies give better rates to people with better credit. Even employers have started checking job candidates' credit histories before they make hiring decisions. The better your credit is, the more responsible you are in the eyes of many institutions.

Credit is not built overnight. If you start small during school, you'll have an advantage when you graduate. Plus, if you establish yourself now, you won't need a cosigner.

Ways to Build Your Credit

• Pay all your bills on time and for the correct amount. Doing so helps you avoid fees and builds your credit score.
• Avoid overextending your credit. Unsolicited credit cards offers may arrive by mail and are tempting to use, but they won't help your credit score. Plus, many of these offers have high rates and annual fees.
• Set up Email & Text Alerts so you get a notification when your bills are due.
• Pay as much as you can of your credit card bill–at least the minimum due and ideally the entire balance. The more you can pay, the less interest it will cost.
• Use your credit card for emergencies only. For routine purchases, use your debit card or cash and pay as you go. Or, use your credit card for one or two small purchases a month, and pay the bill in full each time.
• Budget so you know you'll have enough money in your accounts to pay your bills.
• Review your credit report. As you start to build your credit, it's important to review your credit report annually to make sure that it's being properly reported. You can do so for free at annualcreditreport.com.
• Monitor your credit score for free using My Credit Score in Web Branch. Your score will be updated quarterly and you can track your credit over time. You can also view a snapshot of your credit report.

In order to use credit responsibly, familiarize yourself with the types of credit available. Learn more about the types of credit you can utilize »

More College Life Articles »