Starting college comes with a lot of new responsibilities, including managing your finances. One important financial skill to learn is how to build credit. Establishing credit while you're in college can help set you up for success after graduation and make it easier to reach major life goals.
The best ways for college students to build credit include becoming an authorized user on a credit card, opening a student credit card, making payments on time, keeping card balances low, and monitoring credit regularly.
In this guide, we'll explain what credit is, why your credit score matters, and practical steps you can take to build credit responsibly while you're still in school.
Credit is your ability to borrow money and repay it over time. Lenders, landlords, and other organizations may look at your credit history to decide whether you're likely to repay what you owe.
Your credit history is summarized by a credit score, which you may begin building at age 18. Credit scores can range from 300 to 850 based on factors such as:
When you're in college, a credit score may not seem like a big deal. However, building strong credit early can make many financial milestones easier in the future.
A good credit score can help you:
Building credit doesn't happen overnight, but taking a few simple steps can help you establish a strong foundation.
Become an Authorized User
One of the easiest ways to start building credit is to become an authorized user on a parent or trusted family member's credit card. As an authorized user, you'll be added to their account, and if they use the card responsibly, your credit report can benefit from the account's payment history and age. It’s important to note however, that the opposite could be true as well. If the primary card holder has missed or late payments, or carries an extremely high balance on the card, your credit could be negatively impacted as a result.
For this reason, before becoming an authorized user, you should make sure the primary cardholder:
Open a Student Credit Card
Many financial institutions offer student credit cards designed for those with limited or no credit history. These cards often have lower credit limits and more accessible approval requirements to help college students start building credit. Some also include educational tools to help you learn responsible credit habits.
When choosing a card, look for one with simple, easy-to-understand terms. You should also ensure you meet the card’s eligibility requirements before applying. Applying for multiple credit cards in a short period can cause a temporary drop to your credit score.
Make Every Payment on Time
Payment history is one of the most important factors that affects your credit score.
Even one missed payment can have a negative impact on your credit. That's why it's important to pay your credit accounts on time, including credit cards, student loans, auto loans, and personal loans. It’s also a good habit to pay your utility bills on time, even though they may not always appear on your credit report.
Consider setting up automatic payments or calendar reminders so you never miss a due date.
Keep Credit Card Balances Low
It's not enough to simply have a credit card. How much of your available credit you use also matters. This is often referred to as your credit utilization ratio.
For example, if your credit limit is $1,000 and you consistently carry a $900 balance, lenders may view that as a sign of financial stress.
Try to:
Not only does paying off your balance each month help with your credit utilization ratio, but it also prevents you from having to pay interest on your card purchases as well.
Monitor Your Credit Regularly
Checking your credit report and credit score helps you understand where you stand and identify potential issues early.
Reviewing your credit can help you:
Building credit in college may seem like a small step, but it can have a big impact on your future. By becoming an authorized user, opening a student credit card, making on-time payments, keeping balances low, and monitoring your credit regularly, you can establish habits that support long-term financial success.
No matter what your future goals are, strong credit can help open doors along the way.
BankFive is committed to helping you take the next step toward a stronger financial future. Explore our credit card options and take advantage of our free credit monitoring tools within Online and Mobile Banking to stay informed on your credit health.
The best ways for college students to build credit include becoming an authorized user on a credit card, opening a student credit card, making payments on time, keeping card balances low, and monitoring credit regularly.
In this guide, we'll explain what credit is, why your credit score matters, and practical steps you can take to build credit responsibly while you're still in school.
What Is Credit?
Credit is your ability to borrow money and repay it over time. Lenders, landlords, and other organizations may look at your credit history to decide whether you're likely to repay what you owe.
Your credit history is summarized by a credit score, which you may begin building at age 18. Credit scores can range from 300 to 850 based on factors such as:
- Whether you pay your bills on time
- How much debt you have
- How long you've had credit accounts
- The types of credit you use
- How often you apply for new credit
Why Does Your Credit Score Matter?
When you're in college, a credit score may not seem like a big deal. However, building strong credit early can make many financial milestones easier in the future.
A good credit score can help you:
- Rent an Apartment: Many landlords check credit before approving rental applications. A strong credit history may help you qualify for an apartment and avoid paying additional security deposits.
- Buy a Vehicle: If you need a car, lenders will review your credit score when you apply for an auto loan. Better credit can increase your chances of approval and may help you qualify for lower interest rates.
- Access Credit Cards and Loans: Whether you're applying for a personal loan, credit card, or other financing, your credit score can affect your approval odds and borrowing costs.
- Apply for Certain Jobs: Some employers, especially those hiring for positions involving financial responsibilities, may review your credit history during the hiring process.
- Qualify for a Mortgage: When you're ready to buy a home, mortgage lenders will look closely at your credit history. Building good credit now can help prepare you for homeownership later.
How to Build Credit While in College
Building credit doesn't happen overnight, but taking a few simple steps can help you establish a strong foundation.
Become an Authorized User
One of the easiest ways to start building credit is to become an authorized user on a parent or trusted family member's credit card. As an authorized user, you'll be added to their account, and if they use the card responsibly, your credit report can benefit from the account's payment history and age. It’s important to note however, that the opposite could be true as well. If the primary card holder has missed or late payments, or carries an extremely high balance on the card, your credit could be negatively impacted as a result.
For this reason, before becoming an authorized user, you should make sure the primary cardholder:
- Pays their bills on time
- Maintains low credit card balances
- Uses credit responsibly
Open a Student Credit Card
Many financial institutions offer student credit cards designed for those with limited or no credit history. These cards often have lower credit limits and more accessible approval requirements to help college students start building credit. Some also include educational tools to help you learn responsible credit habits.
When choosing a card, look for one with simple, easy-to-understand terms. You should also ensure you meet the card’s eligibility requirements before applying. Applying for multiple credit cards in a short period can cause a temporary drop to your credit score.
Make Every Payment on Time
Payment history is one of the most important factors that affects your credit score.
Even one missed payment can have a negative impact on your credit. That's why it's important to pay your credit accounts on time, including credit cards, student loans, auto loans, and personal loans. It’s also a good habit to pay your utility bills on time, even though they may not always appear on your credit report.
Consider setting up automatic payments or calendar reminders so you never miss a due date.
Keep Credit Card Balances Low
It's not enough to simply have a credit card. How much of your available credit you use also matters. This is often referred to as your credit utilization ratio.
For example, if your credit limit is $1,000 and you consistently carry a $900 balance, lenders may view that as a sign of financial stress.
Try to:
- Use only a small portion of your available credit
- Pay balances in full whenever possible
- Avoid maxing out your cards
Not only does paying off your balance each month help with your credit utilization ratio, but it also prevents you from having to pay interest on your card purchases as well.
Monitor Your Credit Regularly
Checking your credit report and credit score helps you understand where you stand and identify potential issues early.
Reviewing your credit can help you:
- Track your progress
- Verify that information in your report is accurate
- Spot signs of fraud or identity theft
- Understand how financial decisions affect your score
Start Building Your Financial Future Today
Building credit in college may seem like a small step, but it can have a big impact on your future. By becoming an authorized user, opening a student credit card, making on-time payments, keeping balances low, and monitoring your credit regularly, you can establish habits that support long-term financial success.
No matter what your future goals are, strong credit can help open doors along the way.
BankFive is committed to helping you take the next step toward a stronger financial future. Explore our credit card options and take advantage of our free credit monitoring tools within Online and Mobile Banking to stay informed on your credit health.