As a college student you have the awesome opportunity (and advantage) to score a series of products and services at great rates if you build a good credit portfolio early on. Since most college students are 25 and under, there’s an excellent chance you have not lived long enough to completely or irrevocably screw up your credit. In other words, as a blank slate good credit is very much within your grasp.
1. Start Slow –
As you turn 18 you might begin to start receiving offers in the mail asking you to sign up for credit cards, gas cards, local furniture store credit and so on. No need to sign up for everything that comes your way, be selective and only choose one offer (two at the most) to begin with. That is all you need to start establishing a credit history, one or two credit accounts. If you sign up for too many offers, you risk the chance of getting in over your head and not being able to pay should you lose your job, get into an accident, become ill, etc. Best bet is to sign up for one credit account and keep it in good standing for a year or two and as the account matures, you will qualify for a better rate, higher credit line and or terms.
2. Sign Up For Good Types of Credit –
There are different types of credit. Some types of credit such as student loans are always reported to the credit bureaus whereas local store credit might not be. The local store credit if not reported to the bureaus will not do much to help you establish a credit history. Make sure when you sign up for an offer, it’s one that will get reported whether monthly or at some other interval, so that you get the “credit” literally for paying on time and being a solid customer. You want your payment history on record.
3. Shop Around –
Just as you shop around when buying an MP3 player, car or even your next pair of sneakers you can also compare rates on different types of credit offers. Company A might offer an excellent annual rate but charge an excessive annual fee, company B might offer excellent cash back bonuses but suck you dry on ATM charges. You need to read the fine print and pay close attention to details such as this, as they can make the difference between a good offer and making a huge costly mistake. Check sites like BankRate.com for credit rate comparisons.
We hope the three tips above help you in your credit journey now and for years to come. Start slow, choose wisely and compare rates before taking the final plunge.
[box type=”tick”]Guest article provided by: Missy, a freelance writer that covers personal finance, credit card debt and frugal living.[/box] topics.