Student finances

If you manage to get a good credit score while you are still a student then this can help you with your financial life in the future. The credit score is built over the years but on the same hand ruining the credit score is a matter of just a few days. Getting a decent credit score requires that the person should keep up to his payments on time. Besides according to a survey a person requires three years to build his credit with the help of a credit card. Some time back college students were asked to stay away from the credit card offers, as they would land up in debt even before they start earning. But with the changing times the trends have also changed and now more and more students are opting for credit cards. The financial experts always advise the students to be careful with their credit cards. Even if you get a credit card mind you that just having a credit card does not help you build the credit. Well here are some tips that can help you work on building your credit score while you are still in college.

  Tip1 the credit scores are assessed on a scale of 330 and 830. Having a score that is above 700 is considered as a good credit score. If you want to know your score you should get a credit report. These reports are available with the three major credit bureaus, which are Equifax, Experian and Trans Union. According to the laws every person is supposed to get a copy of their credit report free of cost. So the first thing that you should do is getting your credit report.

Tip2 when you come to know about your credit score you should consider improving on it. Look into the credit report and see where you are lacking. Check the credit report for any mistakes. If there are any mistakes then bring it to the notice of the bureau.

Tip3 the best thing to keep your credit on the track is to follow the rule of not spending more than thirty percent of your maximum credit limit. Make sure that you ask your credit card issuer about your credit limit and make it a point that you dont go beyond it.

Tip4: be punctual in paying all your bills it is advised that you pay all your bills in time so that there is no problem in defaulting on the payments. Every month you would get a bill on your credit card be sure to make the payments on time. If you defer on the payment then you would have to pay an interest rate that keeps accumulating on the total amount.

Tip5: when you apply for a credit card then make sure that you apply for only one. It is very important that you apply for a credit card and move according to your needs. You should not go in for many lines of credit because this can lead to problems and can in turn cause harm to your credit score. You should consider maintaining only one credit card throughout

your student period so that you have to make payments towards only one card and you can keep a track on how much you are spending, as you would be tracking only one account and one credit card. If you have more than one credit card it becomes difficult to maintain a check on the amount that you are spending as well as the amount that you have accumulated.

Tip6 with most of the credit cards you can request the issuer to set your limits to a lower value. Make your limit the minimum that you require so that you are able to keep up with the payments.

Tip7 you should get a savings account with your bank. This account can be used to pay the credit card bills every month. It is advised that you open your savings account at least with the minimum balance that is required so that you are not supposed to pay a penalty. Besides you would have to keep depositing some cash in the account over the time so that you can spend something on the credit card. If you have a checking account then it is advised that you move to a savings account.

Tip8 in case if you are not approved of a credit card you can always get a secured credit card. With a secured credit card you will have to give in a collateral that would be equal to the limit of your credit card. With a secured credit card also you can be in a good position within a year. When you get a secured credit card make sure that there is no annual fees charged on the card and besides it has a grace period of at least thirty days. You should use your credit card only if you have money in your savings account so that the charges are covered.

Tip9 keep in mind that when you sign up for a credit card make sure that your account is set up for a monthly auto-payment so that whatever you spend on your credit card gets deducted from your account every month. The benefit with an auto pay would be that before the amount builds interest you have paid it off. Besides this would also force you to maintain the balance in your account.

If you keep following these tips when you are still in college it can help you build a good credit history and score by the time you graduate.

Next Article

Banner Ads