How to build credit as a student

January 30, 2025

a student making a purchase with his phone

College students have a lot to worry about – from tuition to homework. But creating credit history is also important. Here are 10 dos and don’ts to establish your credit score.

Having a good credit score by the time you graduate will put you in a solid position for real-world financial responsibilities. Big, future responsibilities such as renting an apartment, buying a car or purchasing your first home. Here are 10 tips to lay the foundation for a healthy credit score.

Don’t wait too long to start establishing a credit history.

Building a solid credit history can take time. The more information included in your financial history, the easier it is for lenders or banks to be confident in giving you a loan.

Do get to know your local bank.

Perhaps the smartest – and easiest – step you can take toward establishing good credit history in college is visiting your local bank. Ask to speak with a personal banker and share your financial goal of securing a credit card and establishing a credit history. Your banker can guide you through options. Plus, they can serve as a helpful touchpoint for all your personal finance questions and needs throughout your college career.

Do explore becoming an authorized user on your parents’ credit card account.

Just getting started in the world of credit card ownership? A smart first step might be to become an authorized user on your parents’ credit card account – but only if the card has a squeaky-clean payment history. Being an authorized user enables your parents’ credit card behavior and history to be reported like it’s your own. This is why it’s essential you make sure your parents pay their credit card bills in full every month. You only want to be an authorized user on a credit card account that will boost – not damage – your credit score.

Do consider a secured credit card.

If a young adult isn’t able to get a regular credit card, getting a secure credit card through your local campus bank is a good way to get some independence.. A secured credit card works by having you put down an initial deposit before you get access to a line of credit. Typically, the deposit and credit line are the same amount. The upside is that secured credit cards are relatively easy to obtain. The potential downside is that if you miss a payment, the lender can take your deposit.

Don’t ignore your credit card limit.

Always know the amount of debt available on your credit card – but don’t use that limit. Lenders are going to take a look at how much of your available credit you’re actually using. Stay well under your limit. A good goal is to use less than 30 percent of your total available credit.

Do make small credit card purchases and pay them off in full each month.

Making purchases and consistently paying them off is essential to building good credit. Be sure to pay at least your minimum payment each month but aim for the full balance. Don’t carry balances forward unless you need to. That’s a big key to a successful start.

Don’t use your credit card for non-essentials.

Young adulthood is a great time of your life to exercise self-control and to train yourself to know the difference between needs and wants. It's a great idea to try to limit your card strictly for necessities (think recurring phone bills) and the occasional emergency. Cash should be your go-to for non-necessities, and even then, be mindful of keeping wants to an absolute minimum.

Do avoid collections at all costs.

If you fail to pay off a balance of any kind – credit card bill, utility bills, rent – that unpaid obligation could turn into a collection. Collections are extremely damaging to your credit score because they can stay on your credit report for up to seven years. Obviously, the best way to avoid collections is to pay your bills in full each month. If you’ve missed a payment, contact the creditor immediately. It’s helpful to be proactive. Then immediately pay off the debt.

Do stay on top of student loan payments.

While most student loans have a post-graduation grace period of six months, it’s not too early to start thinking about how you’re going to tackle your student loans. Even one missed payment can cause a big drop in your credit score. Ideally, you’ll start chipping away at your student loans while still in school. Prioritizing loan payments over expensive spring break trips or concert tickets will help establish a healthy credit history. Furthermore, it will give you financial peace of mind that comes with working your way out of debt.

Don’t miss opportunities to establish your credit.

Moving into an apartment with a few friends? Volunteer to put the utilities in your name. By doing so – assuming you’ll be on top of paying the monthly bill on time – you’re seizing yet another opportunity to strengthen your credit history. And, remember: your personal banker can talk to you about other credit-building mechanisms that might not be on your radar.

What exactly is a credit score?

The U.S. Consumer Financial Protection Bureau defines a credit score as a number that is used to predict how likely you are to pay back a loan on time. Credit scores are used by companies to make decisions such as whether to offer you a mortgage or a credit card. A FICO® score is the most well-known brand of credit score. Credit scores are also used to determine the interest rate you receive on a loan or credit card, as well as the credit limit.

Have questions about establishing credit? Make an appointment with a banker or find your nearest campus branch.

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