10 Expert-Backed Ways to Build Credit as a Student

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1. Become an Authorized User on a Parent's Account

One of the most effective ways to start building credit is becoming an authorized user on a parent's credit card account. Mike Sullivan, former director of education for Take Charge America, recommends this approach: "Unless you're 100 percent sure they're responsible, the first credit card that student should have is yours."

By piggybacking on a parent's good credit history, you can establish a positive credit profile without the full responsibility of managing your own account. The primary cardholder maintains control while you benefit from their payment history being reported to credit bureaus.

2. Open Your Own Credit Card

If you can demonstrate independent income, applying for your own credit card might be appropriate. However, today's credit card issuers are more selective when approving student applications compared to previous years. When applying, be prepared for a credit check and understand that your creditworthiness will be carefully evaluated.

3. Choose the Right Type of Credit Card

Clarky Davis, former CareOne Credit Counseling spokesperson, emphasizes researching to find cards with favorable terms: "You must do some research to find a card with the most benefits — a lower interest rate, no annual fees, reasonable credit limits, and clear billing policies."

Consider these options:

• Student credit cards designed specifically for college students
• Secured credit cards requiring a security deposit
• Retail store cards with typically lower credit limits

4. Make Small, Strategic Purchases

To build credit history effectively, use your card for occasional, manageable purchases. Setting up automatic payments for regular expenses like streaming subscriptions or textbooks can help establish a consistent payment history while keeping your credit utilization rate low.

5. Reserve Credit for Emergencies

Maintain available credit for unexpected expenses by avoiding large purchases. This approach helps manage your debt-to-income ratio and ensures you have credit available when truly needed. Keep your credit utilization ratio below 30% to positively impact your credit score.

6. Practice Perfect Payment Habits

Establishing a strong payment history is crucial. Set up automatic payments through a budgeting app to ensure you never miss a due date. Your payment history significantly impacts your credit score, so maintaining on-time payments is essential for building good credit.

7. Monitor All Bill Payments

Your credit-building efforts extend beyond credit cards. With services like Experian Boost, utility and rent payment history can now contribute to your credit score. Ensure all bills, including federal student loans and installment loans, are paid on time.

8. Avoid Co-Signing for Friends

While helping friends might seem tempting, co-signing on credit applications can be risky. Edgar Dworsky, founder of ConsumerWorld.org, warns that co-signing makes you liable for the entire debt and could damage your own credit profile if payments are missed.

9. Limit Credit Applications

Multiple credit applications can trigger hard inquiries on your credit report, potentially lowering your credit score. Focus on building a strong history with one or two accounts before considering additional credit products.

10. Manage Student Loans Wisely

Use student loans exclusively for education expenses and develop a plan for repayment. Consider consolidating loans post-graduation and always make payments during your grace period if possible.