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How to Build and Maintain Credit as a College Student

As you finally attend college for the first time, the change of pace can be exhilarating. At the same time, however, being a college student isn’t either. But we’re not just talking about the coursework you must do.

You’ll get your first real taste of being an adult. One of the most important responsibilities you’ll face is building and managing your credit Your credit plays a profound role in your life ranging from taking out loans to even buying a new house.

There are many things that can affect your credit, but you might not know what they are or how to prevent a problem. In this article, we’ll be going over how college students can build and maintain their credit.

Have a Cosigner

A cosigner is someone who will take the responsibility of paying off loan debt in the event the primary borrower is unable to. Gaining a cosigner, however, can help jumpstart your credit. In this scenario, you’ll have a cosigner on your student loans. In most cases, your parents will become your cosigner as it benefits them in the long run as well.

Apply for a Student Credit Card

Credit card companies understand how vital it is for new college students to start building up credit. Student credit cards can help college-goers build their credit early while providing financial security. These cards are ideal as new college students don’t typically have any kind of history.

Student cards also come with special benefits such as getting cash back for maintaining good grades and welcome bonuses. Alternatively, you can also apply for a secured card, which is funded by your own money. It’s almost impossible not to be approved for this card.

Don’t Apply for Too Many Cards

Credit cards may provide you with financial security, and even a bit of freedom. However, you must be hyper-vigilant when using them. If you spend too much, you’ll be stuck paying it back. If you don’t pay it back on time, you’ll be charged ridiculous interest rates.

Furthermore, applying for so many cards will impact your score. You’d be surprised how many college students apply for cards they can’t handle. There’s a lot more to credit cards than just swiping them for something you want.

They should only be used for emergencies and necessities. To learn more, you’ll want to review a student’s guide on how credit cards work. Credit cards should only be obtained if you’re able to effectively manage your own budget.

Always Pay Your Bills On Time

As you shift into adulthood, you’ll soon come to realize the eternal struggle that comes with paying bills. A credit card is one of these bills if you have spent some of it already. Other bills you can expect to pay include rent, electricity, water, loan, and car payments. Regardless of what bills you have, it’s critical that you pay them when the due date arrives.

It’s not the end of the world if you miss a payment here and there. But you should never let it become a habit. On-time payment is an effective way to build your credit score and that score is really the foundation of your entire financial reputation.

It’s likely that you may find yourself in a scenario where you can’t afford all the bills. If too many payments are missed, you’ll eventually be turned over to collections, which heavily impacts your credit. Should you find yourself in this predicament, your best course of action is to call the company and make a payment arrangement.

Most companies will understand that you’re having financial difficulties and will negotiate with you. You’ll have to repeatedly pay the bill off in increments, but as a result, you’re protecting your credit in the long run.

Tackle Your Student Loan Debt

Student loan debt is one of the most notorious forms of debt; you rack up thousands of dollars so fast, but it takes literal years to pay it off. Fortunately, you’ll have a six-month grace period after graduation, so you can have an easier time building up a bit of financial security.

Once this period ends, you’ll have to start paying off what you owe. You absolutely don’t want to default on your student loans because you’ll have to pay back the entire amount at once.

What’s worse is that you won’t be considered eligible for more federal student aid if you need to go back to college at some point. What a lot of people don’t realize, however, is that you can start making repayments during your grace period. It shows you’re taking initiative and you can be trusted with your loan payments.

Either way, the same rule applies to loan debt as it does to any other bill. If possible, try and invest as much money as you can, so you can be debt-free faster. Making double payments is perfectly fine if you have the money to spare.

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