6 Ways to Build Good Credit as a College Student

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Credit-Building Tips to Establish Credit for the First Time

Good financial management is a critical life skill to master. If you’re a college student interested in honing your approach to credit, start by following a few credit-building tips—including opening your first credit card. With the right credit card and responsible habits, you can establish and maintain a healthy credit score.

The sooner you get your first credit card, the sooner you can start building a strong credit profile. This is important if you want to eventually buy a home or make other significant purchases that require credit. That’s why, before you apply, you need to have a thoughtful, planned approach toward using your new credit card to set you up for healthy habits down the road.


1. Apply for a card with a reasonable limit.

Typically, it’s smart to apply for a credit card with a lower credit limit when you’re just getting started. It’s likely you’ll be approved for a card with a lower limit (a boon to your good credit profile!) and it sets built-in spending limitations. That way, if you are tempted to spend a little more than planned, you can’t rack up too much debt right out of the gate.

What’s a good credit card for college students? Look for features like unlimited 1% cash back on purchases, gas and restaurant rewards, low annual fee or other incentives for responsible use. Find out if the card offers cash back or bonus cash, based on the types of purchases you make and where you shop.


2. Learn the ins and outs of your new credit card and billing statements.

When you’re learning to establish first-time credit, it’s important to read the fine print. Pay attention to key terms, such as APR (annual percentage rate), which is how much interest you’re charged annually on top of your monthly balance. Fees − including application, annual and processing fees − can add up and take you by surprise if you’re not fully aware from the beginning.


3. Keep your spending in check.

Keep your outstanding balance as low as possible month to month. Just because you have a $1,000 credit card limit doesn’t mean you should spend to it. A good rule of thumb is to keep outstanding balances below half of the entire credit limit. Carrying high balances can negatively impact your Keep your outstanding monthly balance as low as possible. You might have a $1,000 credit limit, but that doesn’t mean you should max out your card. A good rule of thumb: Keep outstanding balances below half of the entire credit limit. If you carry high balances, you can negatively impact your credit score. Create a spending plan that includes calculating your monthly income and creating a budget that works for you.


4. Establish first-time credit with small, recurring purchases.

Charging gas, weekly groceries, or a monthly cell phone bill to your credit card—and paying off your balance or keeping it very low − can be a great way to establish revolving credit without accruing debt. Using a credit card for ongoing small purchases can help build a strong credit profile, by demonstrating responsible spending habits.


5. Pay on time, every time.

Remember to pay your bill on time, no matter what. Even one late payment can impact your credit score, especially when your credit profile is still in its infancy. Set up reminders for yourself or enroll in automatic payments to make sure you have your bill covered when that due date comes around.


6. Always pay more than the minimum.

Only paying the minimum payment each month means it will take longer to pay off the credit card balance, which will cost you extra money in interest charges. (A hefty portion of that minimum amount due every month is the interest.) Don’t ignore your monthly statements – they’re important! Read them right away, and pay attention to the total balance. Aim to pay as much as you can toward that balance to get it down to zero as quickly as possible.


Establishing good credit habits is an important part of smart financial management. Check out more of Comenity’s financial resources to learn how you can protect yourself and take a smarter approach to your finances.

This page and the information contained herein is for educational purposes only. The information is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any product, service, or strategy to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any links to other websites are included for your convenience only. Comenity does not endorse any product or service, and is not responsible for the accuracy or reliability of the information, made available through such sites.