Building Credit in College

Building your credit in college can seem challenging and confusing, but it is important to start creating a successful credit journey while you are still a student. For starters, you will need to know what credit is. The dictionary definition of credit is “the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.” Building your credit score in college will help you be able to purchase a car and home in the future. There are a few different ways to start building your credit score while you are in college. You most likely won’t be able to just apply for any credit card without any history, so here are a few ways that you can get started with credit:

1.  Apply for a Secured Credit Card

Here at Gulf Winds, we offer our members who don’t have a credit score or have a poor credit score a secured credit card. A secured credit card allows the user to safely build credit by not being allowed to spend more than they can afford to pay back. In order to receive a secured credit card, you will need to make a deposit upfront incase you do not end up paying the card off. At Gulf Winds, we offer a low rate of 9.00% APR for our members who receive the secured credit card. The secured credit card also helps you stay responsible by having a credit limit of $500. By being consistent with paying back what you owe, you will be able to build your credit up in no time.

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2.  Be Responsible

As long as you are responsible with how you use your credit card (secured or not), you will be able to be a successful builder of credit early in life. Make sure that you don’t overspend to the point that you can’t pay your debt off. A good rule of thumb is to not exceed 30% of your credit limit.

3.  Pay On Time

One of the most important parts of having a credit card and building your credit score is to always pay it off on time. If you miss a due date, your credit score could be severely affected. Make sure to always pay the minimum amount each month, but do you’re very best to pay off your debt in full each month so that your interest does not accrue. You should also be careful of how much of your limit you use. You should stay under 35% of your limit to make sure that you are looking responsible and worthy of a larger limit on your credit card.

^{Article: Should I Pay Off My Credit Card All at Once? - Steve Bucci. Click here to read the article.} 

4.  Monitor You Credit Score

Each year, you get a free credit score check from each of the three credit bureaus. It is smart to check your credit three different times spread out throughout the year. This will help you see how your credit score is improving throughout the year, and it can also help you know if you’ve had fraud to your name or credit score.

5.  Move on to Bigger and Better Things

Once you have had your secured credit card for a year or two, or by the time you graduate college, you should be ready for a more advanced credit card. As long as you have been responsible in building your credit score, you should be able to get a good credit limit with a lower APR than what you’ve had in the past.