Tricks for students to build good credit score – It’s time students become responsible

One of the most interesting parts of growing up is being able to taste financial freedom but learning how to use your finances can be challenging. It is a prerequisite among students to build a good credit as in future this helps you qualify for loans at a reasonable interest rate, auto insurance with reduced premiums, affordable rental applications, mobile phone plans and even a job at a good company! So, with all that said, how do you get started? The Credit CARD Act, which came into effect in 2010, changed all the rules of the credit card game. But to put it simply, it still comes down to showing a responsible behavior while dealing with your finances.

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Credit cards are more like necessary evil; you know you need it badly when you’re out for shopping but once you start misusing it, it backfires you in the form of outrageously high interest debt. So, if you don’t want to get tied down by the shackles of debt, here are some important ideas that you may take into consideration. Read on to know how you can build good credit.

? Be an authorized user on the account of your parents

Parents are always advised to add their student kids who are just off to college and who you don’t think are responsible enough, to their credit card accounts. The first card that a student should have is their parent’s card! The teenager should be an authorized user on the account of his parents so that they can supervise his spending activities. Moreover, this also helps students build good credit through piggybacking. In Piggybacking, a parent makes his child an authorized user of his card provided he himself has good credit. This will boost his kid’s credit score.

? Make sure you get the right credit card for you

Once a student is able to qualify for a regular credit card on his own, it’s vital for him to ensure that he takes the right credit card. He should do his homework by doing some research on finding out the credit card with the biggest benefits like lower rates, reasonable credit limits, no annual fees and clear cut billing policies. If you assess your finances and you think that you might carry a balance, opt for no-frills, low rate card. A cooler option would be a reward credit card.

? Don’t use your credit card for purchasing anything and everything

Timely payments and responsible usage of credit cards will always help you build a good credit history and also discourage the bank authorities from closing down your account due to inactivity. As soon as you get a credit card, you start a credit history and this show on your credit report. The responsible you are with your finances, the cleaner your credit report will be. But if you want to start credit, you have to continuously use the card. Think of regular expenses like groceries and other small expenses that you can put on your credit card.

? Pay off credit card balances every month

When you’re initially trying your level best to build good credit, you should try to carry no balance in your card. Make sure you pay off your balances every month and what if you can’t do that? That will clearly imply that you’re living beyond your means and that you have to curb your expenses in according to your income. A student should have a card only when he has a job or has some sort of financial support. Whenever your carry a balance, you owe interest rates and fees which thereafter leads to debt.
Being a student leaves you with improved financial responsibility. If you are eager to get yourself a credit card, make sure you follow the tips mentioned above to build good credit from the very beginning.