How can I build credit as a student or recent grad?

We know that a good credit score is important for things like buying a house or car. What you might not realize, however, is that a poor score can limit your chances of moving into that great apartment, landing your dream job, scoring a good deal on car insurance, or even switching to a new cell provider.

The good news is that building credit isn’t difficult… All it takes is time and discipline. 

Here are ten ways to start building or improving your credit today:

1. If you have a line of credit, congrats! You’re already building credit. If you’re on OSAP, don’t fret. You’ll begin building credit as soon as you graduate. Be sure to make your payments on time to maintain a good loan rating.
2. Get a credit card NOW and use it responsibly. Length of credit history counts towards 15% of your score. The longer you have a credit history, the higher your credit score is likely to be.
3. Get a secured credit card. If you aren’t eligible for a traditional card, you can get a secured credit card, which is backed by a monetary deposit, to build your credit until you’re eligible for a traditional card.
4. Diversify your credit portfolio by opening and managing a variety of accounts responsibly. Student loans, credit cards, car loans and personal loans all count towards your credit score.
5. Do your homework before applying for credit cards or loans to limit the number of inquiries to your credit, which can eventually add up and lower your credit score.
6. Set up automatic bill payments to help you avoid missing payments for your credit card, loan, or even phone bill. Just be sure you always have the money in your account or overdraft protection so you don’t run the risk of paying insufficient funds charges to both your bank and your lender.
7. Use extra income to pay down debt. The amount you owe accounts for 30% of your credit score. Use income from a part-time job or side project to pay down your student loan debt and credit card debt. Focus first on credit card debt because of the high-interest rates.
8. Fix errors on your credit report. Up to 1/3 of credit reports contain errors. Resolving these now can quickly boost your credit score and save you the headache when you actually need your score to be good. You can get a free copy of your credit report by mail from both TransUnion and Equifax. 
9. Consider consolidating your loans after graduation. If you have more than one credit card, or a high-interest student loan, look into moving those debts onto one, lower interest personal loan. Not only will this help you repay more quickly, but it will also lower the balance on your credit cards, improving your score. Just be sure not to rack up those cards again!
10. Avoid scams like credit repair services telling you they can help you to quickly increase your score! A credit repair clinic has no way of changing accurate information that negatively affects your score. All they are able to do is dispute inaccurate information on your behalf… But you can do that yourself for free!

Building credit as a college student may seem overwhelming, but it doesn’t have to be. With a smart and balanced approach, you can begin to grow a healthy credit score that will benefit you now and in the future.