How to Establish Good Credit as a College Student

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Why is your credit report so important? Once you graduate from UIC online or another institution, you’ll quickly learn how the financial world works. Whether you’re going to apply for an apartment, take out a car loan or even buy a home, the number one thing lenders, landlords and car dealerships look at is your credit history. If you don’t have one or if it’s a poor history, then it’s going to be a lot harder for you to obtain these things.

The best time to start building your credit is while you’re still in college, well before you really need it. Here are a few tips you can use to get started.

Find Out Your FICO Score

Your credit rating is what businesses look at. If you have a low FICO score, then they are less likely to do business with you. And if they do, the terms will be much different. For instance, the credit card lender will give you higher than average interest rates or the landlord will charge you a higher down deposit. So in a sense, having poor credit or even no credit can cost you money. If you really want to save, then you need to work on building up your FICO score. You can check to see what it is by requesting your credit report for free from sites like CreditKarma.com. The FICO score ranges between 300 and 850. A god credit score is anything over 700.

Being Responsible About Credit Building

One way for college students to build their credit history is to take out credit cards. This should be handled responsibly, or you could end up in debt. This will only cause your credit score to drop. You also don’t want to have too many credit cards that you owe balances on. If you’re going to have more than one, make sure you’re paying them off in full or only having small revolving balances on one or two of them.

Consider Getting a Secured Credit Card

These are an option for those who are having a hard time getting a credit card. This is when you put up the money to be placed on the card for use. The lender isn’t at risk, since it’s your cash. But you still have to repay the money you spend each month. This is a great way to practice for a real credit card. Most banks will offer you an unsecured credit card once you have proven yourself with the secured credit card.

Look for Credit Credit Cards Geared Towards College Students

There are some credit cards that are designed specifically for college students. They come with useful benefits, like frequent flyer mile programs, cash back rewards and no annual fees. A variety of credit card companies offer these special cards, including Chase and American Express.

College is a great time to start building your credit. Keep these tips in mind as you begin establishing your credit and working your way towards a high FICO score.

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