Build good credit as a college student- 7 steps to good credit

In 2009, the average college student graduated with over $2000 of debt.

Debt is not always a bad thing, but one must know how to use it wisely. Being disciplined in your credit spending will reap many benefits. As you build good credit and a healthy credit history, you will gain more and more buying power.

Here are some tips on how to build good credit:

· Piggybacking. Become an authorized user on one or more of your parent’s credit cards. When you are named on a credit account with other people, their credit history becomes yours. If your parents have built good credit during their lives, you will get the benefit of their solid history. You probably should NOT carry an actual card with you. Your purpose here is not to make charges to the account, but simply to be named on it.

· Give the credit companies about a month to record your name onto your parent’s account, then procure an easy credit account of your own. One of the easiest credit accounts to secure is a cell phone account. If you are named on only one other credit account (like being an authorized user on another person’s card), you will most likely be approved to get your own cell phone account.

· About a month later, apply for your own credit card, but BE CAREFUL. Only use the card occasionally for essentials like books and educational expenses. Be mindful and disciplined about what you charge. Do not charge more than $100 or so a month. Keeping the balance very low is the goal.

· Stay informed on your credit card balance. Keep in mind that it is very easy for credit card spending to get out of control. Check your balance weekly, even daily, making sure it is staying low. Checking your balance is as easy as a phone call or logging into your account on-line.

· Do not base your spending on your credit limit. This will get you into huge trouble. Determine your spendable income, and set your lifestyle accordingly.

· IMPORTANT! Pay your credit card balance in full every month. If your balance is too high to pay at the end of the month, DO NOT CHARGE anything else on the card until it is paid off –even if it takes several months to get a zero balance.

· Be diligent in paying other bills on time as well, such as: rent, phone, and utilities. Keeping these bills current will contribute to building a solid credit file.

Bear in mind that these tips are for building good credit. If you are not disciplined in your credit spending, it can quickly get out of control and spoil your finances. As you start your life after college, do all that you can to avoid stepping out into the world with a burden of debt on your back. Give yourself the advantage of graduating with a solid credit foundation and little or no debt.

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