The earlier a person can start establishing a good clean credit history the better. One of the easiest ways to start establishing good credit is with the responsible use of a credit card. There’s not better time to get started than while you are in college.
There are benefits to having a good credit history that you probably never thought of. Loan approvals for a house or for that new car are available for people with good credit. Job applicants will have prospective employers checking their credit for clues about how reliable they might be be based upon their past credit history. When landlords look at applications for tenancy the credit report probably weighs the heaviest on the decision. Good credit can get you cheaper insurance rates. If you don’t have a clean credit history utilities will often require a deposit in order for you to get service. Your credit history is important for many different things in your daily life.
The number one most important thing that you must do to build and keep good credit is to make your credit card payment on time every time. Nothing will hurt your credit faster then late making payments.
Making sure to never go above the credit limit on the card is also important. Once you go over the limit on the card the credit card company is going to raise the interest rate on the card without even letting you know..
Next you should always pay off the balance on the credit card completely every month. Use your card wisely, don’t spend on the card unless you have the money in the bank to pay it off. Paying the card off every month has a huge positive affect on your credit score.
Cash advances are a recipe for disaster as well. Granted unforeseen expenditures come up but relying on credit cards to to make ends meet is really a dead end that will catch up to you. Sooner or later your going to have face your debt so don’t let it get out of hand. Interest rates on cash advances can be pretty hefty so don’t use them unless you have the money to pay it off.
Balance transfers from one card to the next can also be trouble in the long term. Often people will transfer a balance from a high interest card to a low interest card. It’s not a bad strategy to lower your interest charges.
So as you can see using a credit card to start establishing credit is fairly easy as long as you use it in a responsible manner. Your college years are the ideal time to get started your credit.