How to Build Credit in College


Understanding how to build credit in college can be a useful skill, but it’s also one that’s rarely discussed. Using credit cards in college has been the downfall of many Americans over the years. Many students aren’t quite ready for the responsibility of “plastic money,” and fall prey to the vicious interest cycle that occurs when payments are missed or only the minimum is paid. On top of this, many students are now putting tuition, book costs, and other expenses on credit. And then, of course, there are those pesky promotional offers, like free t-shirts, that once “sucked in” college kids on campus but now, by law, aren’t allowed on campus (keep in mind—this doesn’t stop them from frequenting local bars and restaurants in college towns).

The bad news is that once students enter the “real” adult world, they will need credit and, more importantly, a credit history. Employers in most states, landlords, and banks will want to know something about the applicant’s credit record. If the applicant has limited or zero credit history, that is okay (although arguably not ideal). But if the applicant ruined his/her credit score in college, that could pose a big obstacle to getting good rates on loans, getting a good job, etc. So, let’s take a look at how to build credit in college in a way that is financially responsible and can help students appear reliable after graduation.

How to Build Credit in College

#1 Leverage Student Loans

Student loans and credit scores form a powerful combination. Leverage it. If you take out student loans, it would be a very smart idea to also work a part-time job in college. And it would be an even better idea to pay some extra money each month toward your student loans. Don’t just throw money at any of your student loans, but use our guide on the best way to pay off student loans. Doing so will put you in a more manageable financial situation after college and it can also mark the beginnings of a healthy credit history. In case you didn’t know, student loans are on your credit report and will affect your credit score.

#2 Pay rent

If you live off campus and pay rent each month, you can ask your landlord to report your payment history to the credit bureaus. Sure, this might take some work on your part, and there is always a chance that your landlord won’t want to do it. But still, it’s worth a shot, and if you are a reliable tenant, you could boost your credit score with this strategy. We’ve covered this in another post; check it out—

#3 Explore Alternative Credit

This suggestion is a bit “out there” in the sense that it doesn’t apply to everyone. But if you find yourself with a really bad credit history after college, it could be a good strategy. There is a growing trend towards alternative credit, and the movement aims to help consumers get back on their feet after making some mistakes. Some big companies are using non-traditional data which both gives credit access to more consumers and helps more consumers make a “credit comeback.” Check out this short list of participants in the movement:

  • The FICO Expansion Score
  • PRBC
  • E-credable
  • Vantage 3.0
  • Thanks for reading, and good luck building a solid credit history!