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Harris-Courage & Grady, PLLC Sept. 14, 2016

A credit score helps lenders analyze how likely it is that you will repay money they lend you. If you’re a new college student, you’re not likely to have any credit history at all. If you have student loans, you’re not yet making payments on them.

Credit cards are the most common way to begin to build your credit score. However, the 2009 Credit Card Accountability, Responsibility, and Disclosure Act prevents credit card companies from issuing cards to people under age 21 unless they have a co-signer or can demonstrate independent income.

A common first credit card for students is to become an authorized user on a parent’s account. This will give the student some of the credit score benefits from the parent. However, if your parents don’t have good credit, this may not be a good option.

Another option for a first credit card is a secured credit card. To get a secured credit card, you make a deposit that is equal to the amount of credit you are given. That way if you don’t make your payments, the credit card company doesn’t lose any money. Use the credit card as you would any other and make your payments on time. Some secured credit cards will allow you to move to a traditional credit card after you’ve made a certain number of timely payments. When that happens, or if you decide to close the account, you will get your deposit back.

There are two rules for using credit cards responsibly. The first is to always make your credit card payments on time. Always. If you’re late, you add on fees, and hurt the credit score you are trying to build.

The second rule is to never buy something on credit that you couldn’t buy with cash. Get into the habit of paying your credit card off every month. That will help you to avoid many financial problems throughout your life.

Once you’ve begun to build a credit score and have been using your credit card responsibly, you may be asked by a friend who isn’t 21 to co-sign to help them get a credit card. Don’t. If you co-sign for something, you are agreeing to pay for it. If your friend doesn’t pay for the things they buy on that co-signed credit card, you are the one who will have to. You won’t have any control over whether your friend pays their bill, or how much they charge on the card. Just say no.

Use your credit card wisely, and pay all your other bills on time too. Some utilities and landlords report to the credit bureaus. Be responsible with your money, and your credit score will show it.