Earning good test scores and grades is one of your top priorities while attending college. It’s also a time to make new friends and try new things. One of these may be getting your first credit card. Some students put off using credit. However, it can be more beneficial for your future to start building your credit rather than avoiding the opportunity.
For many people, the issue isn’t the credit they have. It is debt. Assuming you don’t go into debt right away, there are many ways you can start building a positive credit history. First, pick the right card, and then you can work on paying monthly balances and paying on time.
The Right Card Matters
Research all the credit cards that you can apply for. You want to avoid annual fees when you build credit in college. Think about the perks offered by each card, such as cash-back rewards and fraud protection. Interest rates should be at the top of the list too. They will be a factor if you carry a revolving balance on a credit card. Also, start slow because applying for multiple credit cards at once will lower your credit score.
Pay Off Your Balance with Each Bill
Optimally, you should pay off your credit card bill every month. Stick to your budget even if you use a card. If you accrue debt, you will have to pay interest and your credit score will be lowered. At the same time, don’t just keep your credit card in a drawer. Your credit won’t build that way. Therefore, make small purchases with your card every so often.
Most importantly, pay your bills on time. Over a third of your credit score is based on payment history. Automatic payments may be a good idea. You could also keep reminders on your calendar, set up alarms on your phone, or sign up for e-mail and text alerts.
Other Ways to Build Credit
In addition to paying and managing your credit card balances during your time at New York University, there are other ways to build your credit. Try signing up for a credit card with your bank. If you already have a checking or savings account there, this is much easier. You can also ask your parents if they’ll authorize you to use their credit cards. Thus, if they have a positive credit history, you can work off that.
Checking your credit report is also important. It will help you keep track of things, and see if there is suspicious activity. If you stay diligent, you can get a head start on building your credit in college, prior to, for example, working on the University of Arizona’s masters in public health.