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Articles / Admissions / Seven Smart Ways for Students to Build Credit

May 19, 2020

Seven Smart Ways for Students to Build Credit

A recent story by USA Today found the Credit CARD Act of 2009 is cutting down on card companies cashing in on college students. Cards issued through universities and alumni associations dropped by 17 percent in 2010. This benefits student spendaholics, but a lack of credit history is an obstacle for upcoming grads ready to finance a new car or upgrade their furniture.

I thought I would bring up this topic in light of all of you out there who will be entering your freshman college year in another month or so. Once you hit campus, you'll be solicited for credit cards. In fact, you may already have a credit card, even as a rising college student. Just like your GPA, which began accumulating in 9th grade, your credit history will begin forming as soon as you start using any kind of credit or credit card.

Here are a few smart ways for students to start building credit history.

Credit Cards

We're not suggesting students go out and open a bunch of credit cards, but some plastic used responsibly can go a long way towards creating good credit. There are several options for students to help avoid high interest rates and annual fees.

A secured credit card is one of the easiest for the credit-less to acquire and requires a deposit equal to the credit limit. Rates and fees vary, so comparison shopping is a must. Another option is to become an authorized user on a parents' account. Students don't have responsibility for the bill, but still get the benefits of on-time payments on their credit report.

PT Money put together a list of the best credit cards for students, making comparison shopping much easier.

Store Credit Cards

A merchant credit card is best used for the bare necessities of gas, groceries, etc. They help build a steady history of payment and fit easily within the framework of a budget. Most carry high interest rates so, ideally, you should pay off the balance each month.

Open a Bank Account

This is a given. It's time to put the cash-only allowance policy to an end. While bank account information doesn't appear on credit reports, lenders commonly request it to verify steady income. For those new to managing their own finances, Mint.com is a useful resource for tracking accounts and expenses.


Parents or other close relatives are usually the best co-signer options. Having someone with established credit history co-sign a loan or credit card application leads to lower rates and a greater chance of approval while building credit for both parties.

Student Loans

Student loans aren't ideal, but with the cost of tuition, sometimes they're unavoidable. Typically they have low interest rates and don't require repayment until after graduation, making them a good credit enhancer. The catch is no credit until payments come due.

Employment History

Jumping from job to job is pretty common in college, but sticking with one employer is ideal. Employment history appears on credit reports and lenders prefer to see someone who has stable employment with a steady increase in salary.

Pay Your Bills!

Paying card bills on time is the true key to good credit. If there's a payment coming up and things are tight, don't skip it. Cancel the cable, sell your gift card from Aunt Esther or pawn unused video games and movies. A few missed monthly payments can have a serious impact on a credit score for many years.

So, you can see that there is a common-sense approach to developing a strong credit rating. As I always say, credit where credit is due!


Be sure to check out all my admissions-related articles and book reviews at College Confidential.

Written by

Dave Berry

Dave is co-founder of College Confidential and College Karma Consulting, co-author of America's Elite Colleges: The Smart Buyer's Guide to the Ivy League and Other Top Schools, and has over 30 years of experience helping high schoolers gain admission to Ivy League and other ultra-selective schools. He is an expert in the areas application strategies, stats evaluation, college matching, student profile marketing, essays, personality and temperament assessments and web-based admissions counseling. Dave is a graduate of The Pennsylvania State University and has won national awards for his writing on higher education issues, marketing campaigns and communications programs. He brings this expertise to the discipline of college admissions and his role as a student advocate. His College Quest newspaper page won the Newspaper Association of America's Program Excellence Award, the Pennsylvania Newspaper Publisher's Association Newspapers in Education Award, the Thomson Newspapers President's Award for Marketing Excellence and the Inland Press Association-University of Kentucky School of Journalism and Mass Communications Inland Innovation Award for the Best New Page. His pioneering journalism program for teenagers, PRO-TEENS, also received national media attention. In addition, Dave won the Newspaper Association of America's Program Excellence Award for Celebrate Diversity!, a program teaching junior high school students about issues of tolerance. His College Knowledge question-and-answer columns have been published in newspapers throughout the United States. Dave loves Corvettes, classical music, computers, and miniature dachshunds. He and his wife Sharon have a daughter, son and four grandchildren.

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