How to build credit as a college student | 2023

Student Loans Are Complicated.

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Greetings, Today, I’m here to discuss a critical topic that doesn’t get enough attention — credit. But I’m not talking about college credit for coursework. Instead, I’m focusing on the kind of credit a college student will need when they graduate. I’m talking about building a good financial credit history to ensure a solid start in post-college life.

Many believe that it’s difficult for college students to establish a good credit record during the traditional four years of college after high school.

However, it’s entirely possible, and here are some of the best ways to get started.

Understanding Credit

Firstly, it’s essential for parents to explain how credit works. A great teaching tool is for the parent to request their current credit report from one of the major credit reporting agencies like Equifax, Experian, or TransUnion. Then, have the student order their own credit report. By law, everyone can order one free report per year from each agency at

By comparing the student’s simple credit report with a parent’s much more complex one, and explaining all the items on the report and why they matter, the student can gain a better understanding of credit. It’s beneficial to order both the student’s and the parent’s credit score, as most students will have a very low score due to a lack of credit activity. The parent’s score, hopefully, good to excellent, serves as a goal for the student to work towards.

Building Credit History

Parents can be instrumental in cautiously creating opportunities for the student to build their credit history. One effective method is for parents to make the student an authorized user on one of their credit cards. The parent can set rules for and monitor the student’s use of the card, and as the balance is paid off each month, the student will benefit from sharing the parent’s good credit record.

Another option is for parents to co-sign a small loan, for instance, on a used car for the student to have at college. The student’s timely repayment of the loan builds more good credit history for their post-graduation life. 

If the student has taken out a federal unsubsidized student loan to help with college costs, they can choose to pay the interest that accrues monthly. These timely payments are reported to credit agencies and can substantially improve the student’s credit score.

Getting Real Credit Cards

When a student turns 21, typically during their junior year, it’s an opportune time to get one or two real credit cards. During this brief window between turning 21 and graduation day, credit card companies are usually willing to provide full-feature credit cards to most full-time college students. After graduation, this window closes, and graduates will either be stuck with low-limit beginners’ cards or no cards at all.

Preventing Identity Theft

Lastly, right after the student gets their own real credit cards, parents should teach their students about identity theft and how to prevent the damage it can do to a carefully built credit record. It’s essential for parents to help students freeze their credit at each credit reporting agency. 

Students can thaw and refreeze their credit when it comes time to do anything that requires a credit check, like applying for their first job or renting their first apartment.

Remember, a healthy credit history is the key to a solid financial future. 


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