How to Start Building Credit

How to Start Building Credit

BIG Ideas:

  • Building credit as a college student can help you reach your goals later in life, like buying or renting a home, or even getting a job.
  • Making payments on time and not using all of the credit available to you can help you boost your credit score.
  • Monitoring your credit activity on a credit report and in your card’s mobile app helps you identify fraud and errors.

At this point in your young financial life, you’ve probably heard a lot about credit. Some of it may not be good. You may have, for example, been warned by your parents or teachers about the dangers of credit cards. Or worse, watched a friend or family member get into trouble with credit card debt. It happens.

But, there’s a whole other side of credit you may not know – a very good side. Building credit as a college student can help you achieve some pretty important goals in the real world like getting an apartment, buying a car or home someday, getting a job, or even continuing your education.

How to build credit as a college student

Building credit in college is a lot like maintaining your grades. You need to grow your knowledge, develop good habits, and stay on top of things. Let’s take a look at a couple ways to build credit, which, combined with advice from your parents, trusted friends, and financial advisors, can help you reach your goals in life.

    • Open a checking account. Sure you can keep your money in payment apps, but having a checking account is an important first step in building an independent financial life and ensuring you make your credit payments. You should also request a debit card with your account to give you an easy way to make purchases and payments.


    • Apply for a credit card. Admittedly, getting a credit card is not as easy when you’re in school and don’t have income or an established credit history. If you don’t get approved, you can apply for a secured card, which requires you to put up a cash deposit. Then, when you make purchases, you’ll be using your own money. A secured card is a great way to get in the habit of using a credit card responsibly.


    • Try again. If at first, you don’t succeed with being approved for a credit card in college, try again by applying after you have a job and a few months of income.


    • Pay your bills on time. Missing or paying bills late can harm your credit and result in costly fees for you. To ensure you pay on time, set up automatic payments from your checking account.


  • Monitor your credit. Just like you keep track of your grades, you need to keep track of your credit. You can obtain a free credit report once a year from each of the three credit reporting agencies, Equifax, Experian, and TransUnion at of these agencies will give you a credit score, which is a calculation based on your credit history, such as the number of accounts you have, your total debt, and your history of making payments. Lenders will use this credit score to determine the likelihood that you will pay back the money they lend to you.

Also if you see an error on your credit report, report it immediately to the credit bureaus. Mistakes and fraud can happen.

    • Watch your credit card balances. When you get approved for credit, a lender will give you an available credit line, which is the total amount you can borrow. The amount of credit that you use is called your credit utilization. If you have a high utilization, meaning you use a lot of the credit available to you, it can hurt your credit score.


    • Avoid multiple credit applications. Every time you apply for credit, such as a credit card or other loan, the lender will make a “hard inquiry,” which is reported to the credit reporting agencies. Having too many of these inquiries can lower your credit score.


  • Use your credit card app. You can stay on top of your transactions, balances, and payments by using your credit card company’s mobile or online app.

Your student loan helps build your credit

If you have student loans, you’ve already started to establish a credit history. When your payments are due, make sure you pay them on time.

Brazos is here to help you in your journey to financial independence

For more than 40 years, Brazos Higher Education has been helping college students succeed. As a Texas non-profit, we can offer you BIG savings on various student loans and helpful guidance to ensure you build the financial future you deserve. Contact us today!