Jan 11 2013
Whether you have just entered college or if you’re already enrolled and you’re seeking ways to secure your financial future, building your credit rating can help in many areas of life. When you’re in college, building your credit rating is possible regardless of your age with the proper support and the right opportunity. Before you begin to build your credit rating, it is important to determine your own personal goals for your financial future and your capabilities on affording your credit card bills each month once you’re approved.
Before Building Your Credit Rating in College
Review the budget you have available to spend each month based on your income, current bills, and tuition costs. Before you apply for a credit card, determine why you want the card and how much you plan to spend personally each month to help building your credit score.
By spending money using the credit card each month and paying the bill on time without any delay, your credit rating will improve regardless of what you’re using the card for when making a purchase. You should also plan on using your credit card for payments you already make such as paying your phone bill. So, you should create a plan on what things you’ll use your credit card for and what things you won’t.
It’s also ideal for you to get a steady source of income through employment as this would heavily benefit your credit card application. Even when going for the lowest credit limit, they could still deny you if you don’t have a source of income.
The Benefits of Building Your Credit Rating in College
Building your credit rating and overall score in college can help assist you if you want to take out a loan for a vehicle, home, or even a personal business investment once you have graduated. Having a higher credit rating means you’re also capable of being approved for loans that have lower interest rates, ultimately saving you more money as long as you’re capable of paying all of your bills on time. Investing in a home or launching a business is entirely possible if your credit rating is high enough by the time you graduate or receive your degree from college.
In addition, it can also theoretically be useful when applying for positions that conduct background and credit checks on potential employees.
Find a Student Credit Card
Applying for a credit card for students is often possible as long as you can provide proof that you’re a student. If you can provide proof of your income as well, searching for a student credit card is simple and does not require the signature of a parent or another guardian to have the card approved as long as you are over 18. Student credit card offers may be available on a college campus you’re attending as well, so make sure to inquire with your college. You can also visit a local bank or compare various types of student credit cards that are available to you right from home online.
Ask Your Parents to Co-Sign for a Credit Card
If you’re unable to sign for your own credit card, you have the ability to ask your parents to help by co-signing for the card with your name on it. Your parents must, of course, trust you to pay off the credit card bill each month before co-signing for the card, as the responsibility of the bill will be theirs if you’re unable or unwilling to pay for the charges yourself.
If you’ve shown financial responsibility while you were in high school, this shouldn’t be too much of a problem.
Use a Secured Credit Card
It is also possible to apply for a “secured credit card” if you’re not qualified for a traditional card and if you do not have relatives who will help to co-sign for a card in your name. A secured credit card is an option that allows you to invest a specific amount of money into an individual savings account in exchange for the card itself. By depositing a trusted amount of money, you’re able to use the card to help with improving your credit rating. A secured credit card can be applied for by using trusted banks and institutions online as well as by applying for the card in person at a local banking branch.
Comparing Credit Card Offers Online
Searching for the ideal credit card with the lowest interest rate for students is possible by browsing online to compare the available options. Looking for a credit card that is right for you online is a way to read and review all card terms and conditions while also comparing interest rates and credit limits, based on your qualifications, age and whether being a student gives you an advantage. Comparing credit cards online is ideal and can also save time regardless of the type of card you’re interested in and your purpose for applying for one.
Using Your Credit Card Responsibly Once you’re Approved
Once you have been approved for a credit card (co-signed or to you individually), it is essential to be responsible at all times regardless of how much the card is used. Any time you spend money on your credit card, be sure to pay the monthly bill in a timely manner. When you avoid paying your credit card bill on time, it may negatively impact your credit score and rating, causing it to drop. Ensuring you pay the bill on time every time will also help you boost your credit rating instead. Using the card for items you need to purchase is highly recommended, as it will allow you to stay within your budget so you’re never incapable of paying off your credit card bills.
This article was written by Donald Turner on behalf of Kanetix. When searching for a credit card, make sure to consider checking out Kanetix and see how they can help you find the right credit card.