If you’ve thought that just because you’re a student that means that you don’t have to think about your credit, it’s definitely time to think again. The truth of the matter is that you will definitely need to think about your credit if you want to do anything. If you want to get into some internship programs, you will need to focus on your credit. If you want to get into any type of car, you will need to think about credit. If you ever want to move off campus and get your own place, you will need to think about credit.
Whoa. That’s a lot of things that involve credit, even though you might think that no one’s looking at your credit. Actually, you might be surprised at all of the credit products out there that are designed to think bout students. People want you to have credit, and they want to make sure that you are developing a strong relationship with them at the very start of your adult life, so that by the time you’re ready for the real big decisions — like a house — you’ll go to them before you shop around. It doesn’t always work out like that, but it’s definitely something to think about.
Now that you know the background part of it, you might really wonder what else you need to do in order to start building credit. There is actually a process to all of it, so make sure that you put these steps to action in the proper order. It can be tempting to just jump ahead, but that’s not what you want to do at all. You will not get the results you deserve that way!
First and foremost, you will want to really take a hard look at what you’re bringing right now, as well as what you have going out the door each and every month. You might think that you know all of your expenses, but you might be surprised. The best thing that you can do is look at your finances because they will tell you how aggressive you can go about building credit.
Once you’ve determined how much you really make and how much you spend, you will want to start with a small credit card. Generally speaking, this is one of the easiest credit products to get, because you don’t really have to do much except be a student. There are a lot of credit cards out there that cater to students, even if your parents aren’t footing the bill. You can search online for credit cards that sound interesting to you. Be careful though — make sure that you really look at the fees before you proceed, otherwise you won’t get anything accomplished except racking up debt from the beginning.
Once you receive the credit card you requested, you don’t want to max it out at the very beginning. This tells the credit card company that all you’re going to do is use up credit and not pay it back. This is risky behavior, and they could end up cutting your limit or cancelling the card outright if they’re really that scared.
Pick something that you know you’ll pay off quickly, like your gas purchases. This way you will be building credit and demonstrating that you can pay on time. Your gas purchases will not max out your card, which makes it a true win-win situation!