Maturity involves being financially independent, and this is a big and challenging phase of a college student’s life who is about to face the real world in a few years time. Establishing one’s creditworthiness should be done right the first time as this will have an impact on your future loan transactions and other applications. Some companies even consider good credit standing as a pre-requisite to employment.

As a rookie to the financial independence, college students tend to neglect to maintain high credit scores. As revealed by the research done by CreditKarma, credit scores for ages 18 to 24 years old ranges to 630, which is not good generally.

According to the USA Today, a fair credit score ranges 730 and up while a score below 650 is most likely unacceptable.

Exposing yourself to a wise and responsible financial independence at an early age will impact your creditworthiness in the future. Start as soon as you enter collegiate, and find ways to improve them. How to get started? The answer is already mentioned – be responsible.

Should You Worry About Credit as a Student?

Your credit score might be the last thing you’ll ever worry at the moment while you enjoy your college, but it greatly impacts your future. Probably, you have your parent’s signature to co-make for your student loans, but won’t you like being financially independent in the future?

Here are some advantages you’ll get when you start building your credit history at an early time:

  • You can easily fulfill your dream to own a car or a dream home early once you’re capable. Lending companies can surely grant you one.
  • Renting your own place can be easy as landlords who’ll run credit checks before allowing you to rent their property will come easy.
  • Your future employer might consider it an edge for you to be employed knowing you are financially and personally responsible.
  • You can haggle for lower interest rates than the usual because of your high credit scores.

Apply for Student Loans

It sure is difficult for a student to qualify for private student loans or credit cards wearing no badge at all for any credit history. So how does one start creating credit scores in this difficulty? Consider federal student loans.

Unlike private loans, federal student loans do not require an established credit history, to begin with. It does not require any credit check and funds are designed to help you in school finances with flexible repayment terms.

Paying off your federal loans on time likely improves your credit score and it accumulates over time.

Since students don’t have a fixed source of income yet, chances are you’ll miss paying on time. If this happened, elevate your problem to the loan provider and seek forbearance. The aid they can provide is to offer you an Income-Driven Repayment Plans (IDR), that’s computed based on the borrower’s cash flow. You can use a student loan calculator like this for reference.

The Importance of Good Credit Habits

Once you’re done on the first step of obtaining a loan, you’ll have to embrace being a responsible borrower. Manage your credit diligently. Getting the answers on how these credit scores works will inspire you to be financially responsible.

Keeping up with your loans by paying the monthly amortizations always in full. By paying the right amount of your monthly amortizations, you give your lenders an impression on how reliable you are to pay off debts. Its one of the factor considered in giving you credit scores.

Choose the Right Card for You

If there’s a dire need to get a credit card, choose the one that fits your needs and specifications. Select the one that carries low-interest rates, minimal annual fees, and consider freebies and point systems they might introduce to you. (See this list of rewards credit cards)

According to Sullivan, students should consider getting a retail card as this have lower spending limits to keep you from huge spending temptations. You must note, however, that this must be paid regularly in order to build good credit scores.

If you’re not qualified for a retail card, a secured credit card could be an option as a starter. This type of credit card is attached to a savings account, but in time, you might be offered a regular credit card if you were able to show creditworthiness.

Stay On Top of Your Credit Score

Going back to the top, practice your financial maturity by staying on top of your credit score. Manage it, own it, and live with it. There are websites such as that offer paid services to allow you on keeping up with your credit score from time to time. This might not be necessary, though, if you cannot afford it. You can just simply check your credit score by schedule – say every four months.

Keeping up with your credit scores will allow you to report some mistakes that could possibly damage your name in the financing world and cause serious damage to your credit standing.

Final Words

Creating a long history of good credit standing can translate to a positive credit score. By doing what is told – to pay loans on time – this can be achieved. Start by trying to get a co-signed or even your own loan.

By the time you are earning on your own, apply for an independent loan such as secured credit cards or an auto loans to further practice responsible handling of monthly amortizations. Just don’t go beyond your capacity to repay as this will start to pull your credit scores down.