Financial Advice

How to Build Excellent Credit as a College Student

It’s not as hard as it might seem to build excellent credit as a college student. It starts with being responsible about your balances, your timeliness, and your borrowing power.

Published Jul 5, 2018 | Updated May 8, 2024

This fall, countless students will enter college for the first time. It’s an important and exciting time in a person’s life. You’re just turning into an adult, and the world is at your fingertips. College is a great opportunity to make connections and build your network, but it’s also the perfect time to get your adult life started on the right financial foot.

Unfortunately, many college students don’t learn about personal finance in high school. It’s a topic that is often overlooked in schools and even in homes. So, when you go to college, it can be a challenge to track your expenses or know how to build credit. Consider these basic tips for starting to build good credit once you start your college career.

Good Credit Is Important

This may seem obvious, but many people inexperienced in the world of finance may not realize just how important good credit is. Having good credit will become important when you’re ready to make large purchases, such as buying a home or a car. Your credit score proves to potential lenders that you are a reliable borrower. The higher your score, the more likely lenders are to offer you a loan at a good interest rate. How do you get good credit? Read on.

Give us a call, or visit your local branch anytime to chat with a Personal Financial Representative.

Beware of Credit Card Balances

For years, people believed that you needed to keep a balance on your credit card in order to get a good credit score, but this is not true. Having a credit card is fine, and opening one can even help raise your credit score because it increases the amount of credit you have available. However, you should always pay off your balance. Credit cards often come with high interest rates, so leaving a balance on your card could mean paying more in interest over time.

Pay Your Bills on Time

If you don’t pay your bills on time, even if it’s something as simple as a library late fee, you could be reported to the credit bureaus. Once a credit bureau knows you’ve been late on a payment (whether it’s 30 days or 90 days), your credit score can drop. As a college student, you might not have regular bills like a mortgage, but you might have a car note, a credit card bill, or even a cell phone bill. You’ll need to pay all of these types of bills on time, every time to avoid a drop in your credit score.

Be Knowledgeable About What You Borrow

Part of becoming an adult is setting yourself up for future success. This includes being hyper-aware of what you borrow. If you take out student loans for your college education, be sure that you know the full amount you’re borrowing. Remember, even if you don’t have to pay it back and make timely payments right now while you’re in school, you will have to pay it back at some point. Reducing the amount of debt you have in the future will help you pay off your loans faster, which can help you improve your credit score over time.

Ultimately, you can build excellent credit as a college student. It starts with simply being responsible about your balances, your timeliness, and your borrowing power.