1. Make student loan payments while in school. Instead of taking loans out in school and deferring payment until graduation, college students can begin making student loan repayments while enrolled. Not only will this reduce their overall debt when they leave school, but it will help their credit by establishing a solid payment history.
2. Apply for some credit, but not a lot. College students should avoid applying for too many cards and loans, as that can hurt their credit, but they should not avoid applying altogether. The goal is not so much to gain access to funds to pay for a lifestyle one can’t yet afford. Instead, the goal is to use the credit cards strategically to establish a history of making small purchases and then paying them off.
3. Make sure your rent payments are reported on your credit history. Rent is one big bill that college students often pay regularly, and as such is worth ensuring it is reported to the credit agencies so that it counts toward a FICO score. Paid services such as eRentPayment can ensure that your timely rent payments are being reported to agencies such as Equifax.
4. Do not cosign for loans or credit cards. When an individual cosigns for a loan or credit card for someone else, they are essentially entrusting their credit rating to the individual for whom they cosign. Should that person make late payments or charge a high amount, the cosigner’s credit rating can suffer, even though they had nothing to do with these decisions.
5. Keep student loans to a minimum. One way to kill a credit score is to have a high amount of debt and a low income, a situation that many college students find themselves in when they use student loans to fund a lifestyle. To avoid this, students can ensure they use loans only to pay for books, classes, lab fees, and other direct education expenses.