Most people start college around 18 years old, and with zero credit history. What they don’t realize is that after four years, future employers take credit history into account when looking at job applications.
Oftentimes, college students are bombarded on their first day of orientation with applications for their very first credit card. While it may be tempting to tap into this newfound resource, it’s super important to learn how it affects your credit score. Not all cards are created equal, and you want ones that won’t take advantage of your rookie status. If you can, try joining a family credit card or become a co-signer. What makes your score go up is consistency with paying bills on time. By piggybacking off your parents, you get the benefit of inheriting their trustworthy payment dependability and, thus, high credit score.
A great way to slowly build up reliable credit history over time is to set a monthly bill to autopay each month. This can be for Netflix or a phone or utility bill. The idea is consistency and dependability. As a student, it is possible that your monthly rental payments can be added to your credit report if you apply with a third-party service for verification and then report them to the three credit bureaus: Equifax, Experian, and TransUnion.
In addition to paying off all of your credit card bills completely in full every single month, the next way to boost your credit is by paying back your student loan. Many student loans have a grace period that lasts around six months after graduation. It is vital to understand that you can significantly harm your credit score if you miss even a single student loan payment.
Contrary to popular belief, some people think that they can stay off the grid and pay for everything in cash and have great credit. The opposite is basically true. While they won’t have negative credit, if they didn’t need to take out a school loan, they would have the same nonexistent credit history as someone starting their first day of college. This can hurt almost as much as someone with bad credit history.
Bills, in general, need to be paid off within the standard 30-60 day window. You want to avoid having any bill go to a collection agency, whenever possible. This will be a huge stain on your record until it gets removed.