Strategies College Students Can Use to Build Their Credit Score

College is the perfect time for students to begin establishing and building their credit score. Having good credit opens up financial opportunities that will be useful for years after graduating.

Unfortunately, many students miss out on credit-building during college due to misconceptions or lack of knowledge. The good news is there are multiple straightforward strategies students can use to start strengthening their credit score while still in school.

Follow these tips to build your credit score as a college student.

Understand the Importance of Credit Scores

A credit score is a three-digit number measuring an individual’s creditworthiness based on their borrowing and repayment history. Scores range from 300-850.

Higher scores reflect timely payments and responsible credit use. A good credit score unlocks better rates on loans, credit cards, rentals, and more. Poor credit leads to higher costs and denial of applications.

That’s why building credit early as a student is crucial. Establishing good credit takes time so beginning the process in college sets graduates up for financial success.

Check Your Current Credit Report and Score

The first step is checking your current credit status by obtaining your report and score. Students can request their credit reports for free weekly through AnnualCreditReport.com to review accounts and look for errors.

Credit scores must be purchased separately. Options include:

• MyFICO – Purchase FICO credit scores are used in 90% of lending decisions.
• Credit Karma – Track VantageScore credit scores free.
• Credit card companies – Some card issuers provide free monthly scores to customers.
• Banks and lenders – May offer account holders free access to certain credit scores.

Checking early allows students time to start improving scores while still in school.

Open a Student Credit Card

One of the most effective ways to build credit as a college student is opening a student credit card in your own name. Make sure to pay balances in full each month.

Benefits of student cards include:

• Build credit history – Your payments get reported to bureaus.
• Improve credit mix – Cards diversify your types of credit.
• Show responsible use – Keeping balances low avoids red flags.
• Establish relationships – Can upgrade to better cards after college.
• Gain perks like rewards or cashback to save money.

Opt for cards without annual fees. Compare options across major issuers.

Explore Student Loans with a Cosigner

Taking out a small federal or private student loan with a creditworthy cosigner, like a parent, builds your credit if payments are made on time.

Since undergrads rarely qualify for individual loans, having a cosigner – who takes equal responsibility for repayment – allows approval. Just keep the loan amounts you need to minimums.

Making monthly payments directly results in positive credit entries. Interest rates are also typically lower than consumer credit cards.

Become an Authorized User on Parent’s Credit Card

Parents can add college students as authorized users to their credit card accounts to help their child establish a credit history and an improved score.

The primary cardholder’s payment activity gets added to the authorized user’s credit reports even without the student using the card. This instantly gives a credit record boost.

However, negative marks on the primary cardholder’s account also impact the authorized user’s score.

Apply for a Credit Builder Loan

Credit builder loans allow borrowers to demonstrate responsible usage and repayment of loan funds to build credit scores over time.

Borrowers receive the full loan amount upfront but the money is held by the lender while being paid back with interest in fixed monthly installments over 1-2 years. On-time repayments get reported to national bureaus.

Once fully paid off, the borrower receives the loan money that was held by the lender. Interest rates are low and there are often no fees.

Use Alternative Credit Options

Some additional accounts students can open to demonstrate responsible usage that may gradually report to credit bureaus include:

• Retail credit cards with responsible usage
• Secured credit cards backed by a deposit
• Utility bill payments in your own name
• Rent payments reported by the landlord
• Checking/savings accounts kept in good standing
• Phone contract bills paid on time

Practice Responsible Credit Habits

Building credit requires using any credit lines responsibly by making at least minimum monthly payments on time. Late or insufficient payments lead to score damage.

Other positive habits include:

• Keep credit utilization below 30% of available limits
• Avoid constantly opening many new accounts
• Don’t close unused old accounts as history length boosts scores
• Review reports and dispute any errors with bureaus

Being prudent with a first credit line shows lenders you can handle more credit in the future.

Be Patient and Monitor Progress

Credit scores take diligence and patience to build. Checking your score frequently lets you gauge your progress. Scores only worsen when mistakes are made so learn from any score drops.

Keep accounts open at least 6-12 months before expecting notable changes. Consistently applying the right habits ensures steady score increases over time. Within a year or two of responsible management, students see significant score improvements.

Consider Credit-Building Course Options

Some universities offer credit management courses providing structure and guidance for establishing credit. Coursework covers:

• Checking reports
• Improving scores
• Responsible usage
• Debt management
• Consumer rights and protections

Learning through credit courses prevents expensive score pitfalls. Speaking with financial aid offices can identify available campus credit-focused courses.

Final Tips for Building Credit in College

Building credit in college lays the foundation for financial flexibility in the future. Employers and lenders view responsible credit management as a sign of maturity and reliability.

Make use of your student years to demonstrate you understand proper credit behaviors. Monitor your reports and scores each semester. The habits you build will reap rewards for decades to come.