How college students can improve their credit score

I know that having a good credit score is probably the last thing that most college students want to be thinking about. You’ve got finals and roommate issues and student loans to worry about, finance topics can wait, right?

Find out how you can improve your credit score. (Credit: US Credit Card Guide)

Find out how you can improve your credit score. (Credit: US Credit Card Guide)

But unfortunately they really can’t. So read on for the things you need to know about how to improve your credit score.

Why you want a good credit score

Yes a good credit score is important for later in your adult life, but let me share with your present-day college student self why this finance topic matters—a good credit score can affect your ability to get student loans and much more. I’ve got your attention now, don’t I?

There are four ways you can get money for college: grants, scholarships, federal student loans or private student loans. While going the private loan route should be your last resort, if you end up pursuing that option you’re going to need either a great credit score and/or someone to co-sign the loan with you. What’s more, if you are considering consolidating any loans after graduation, a good credit score will help you again. Future employers can look at it as well as landlords.

How to improve your credit

When it comes to a good credit score, not many college students have one. In fact, Credit Karma found that the average score for people aged 18 to 24 was 630, and I can tell you that isn’t ideal, as anything below 650 is considered bad. So what are the things you need to know about how to improve your credit rating?

  • DO pick a credit card that is right for your situation as a college student. Consider one with fraud protection for example.
  • DON’T go nuts applying for cards. One at a time will do.
  • DO use your card. Having it and not using it doesn’t help get you a good credit score.
  • DON’T carry a balance on your card if you can help it.
  • DO make payments on time. Being late is bad for your score.
  • DON’T open and close accounts. A post on simpledollar.com explained, “It’s recommended that you keep your oldest credit card open to show a long length of account duration, which benefits your credit.”

More insight on finance topics

What’s working against you as a college student when it comes to how to improve your credit? Here are the top three things you need to know:

  • Your age. The Credit CARD Act of 2009 made it more challenging for anyone under 21 to get a credit card. This is good because it prevents college students from racking up debt they can’t pay off, but it doesn’t do you any favors on the flip side when it comes to establishing a good credit score.
  • Your age. Yes, your youth is a double whammy when it comes to a good credit score. Not only can it be hard for you to even get a credit card when you are younger, but also the longer you have a card the better for your credit. Basically you just have to bide your time.
  • Your student loan debt. Circling back to what I wrote about in the beginning, a good credit score helps you get student loans, but not making your loan payments on time can wreck your credit score. So stay on top of those payments.

Do you have a good credit score, or are you interested in how to improve your score? Let us know in the comments.

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