Establish Good Credit While In College
The earlier a person can start establishing a good clean credit history the better. One of the easiest ways to start establishing good credit is with the responsible use of a credit card. There’s not better time to get started than while you are in college.
There are benefits to having a good credit history that you probably never thought of. Loan approvals for a house or for that new car are available for people with good credit. Job applicants will have prospective employers checking their credit for clues about how reliable they might be be based upon their past credit history. When landlords look at applications for tenancy the credit report probably weighs the heaviest on the decision. Good credit can get you cheaper insurance rates. If you don’t have a clean credit history utilities will often require a deposit in order for you to get service. Your credit history is important for many different things in your daily life.
Making your credit card payment on time every time is the most important factor in building good credit. Making your payments late or not at all is the quickest route to lousy credit.
Always stay under the credit limit on your credit card. Go over the credit card limit and rest assured the card company will raise your interest rate and won’t even tell that they are raising it.
It’s important not to carry a balance on your card so pay it off every month without fail. Don’t purchase things that you don’t have the cash for otherwise you’ll wake up one day and realize you have huge high interest debt that you can’t pay off. Pay it off every month and your credit score will soar.
Cash advances are a recipe for disaster as well. Granted unforeseen expenditures come up but relying on credit cards to to make ends meet is really a dead end that will catch up to you. Sooner or later your going to have face your debt so don’t let it get out of hand. Interest rates on cash advances can be pretty hefty so don’t use them unless you have the money to pay it off.
Getting in the habit of transferring a balance from one credit card to another is also another way people get into trouble. The lure is that you can transfer a balance from a higher interest rate card to one that has a low introductory rate. It’s not a bad strategy to lower your interest charges but don’t get caught in that never ending cycle.
So as you can see using a credit card to start establishing credit is fairly easy as long as you use it in a responsible manner. Your college years are the ideal time to get started your credit.
