Maintaining Healthy Credit in College


College is a great time to start getting into good credit habits. If you are a student, this might be the first instance in which you are spending extended periods of time away from your family. It can be easy to let things fall by the wayside during this time, but building good credit doesn’t have to wait until you are graduated and have started a career.

If you have student loans or use a credit card, whether it is one you share with family members or not, you have already begun your journey into using credit. While student loans and credit cards certainly play a different role in how they affect your credit, it is important to know that your credit history is underway. Your credit report is comprised of your entire credit history, which starts the moment you begin using credit.

Because of this, college is the time to start forming your budget and learn how to use credit responsibly. This means forming responsible spending habits and living within your means. If you are a college student and looking for some direction to get your budget under control, consider the following tips:

Know the difference between need and want

When you are immersed in a situation where many peers have things you do not, such as clothing or tablets, it can be difficult to decipher what is necessary and what is not. Keeping up with other students in terms of fashion or technology is not the goal, but maintaining a budget and earning good grades is.

However, this doesn’t mean there is no room for fun. College in Colorado, a money management website, recommended focusing first on what you need. Once you have these items, if you have budgeted correctly, there should be leftovers, which you can spend on what you want.

Understand your student loans

Even if you are not graduating for a few years, you should have an understanding of how your loans work. Many students put off familiarizing themselves with their loans because they think they have time. But the reality is that college moves quickly and before you know it, you will be getting bills in the mail.

According to U.S. News and World Report, you should understand what your debt is going to look like and start to figure out a reasonable repayment plan before you graduate. It can be difficult to save this monthly amount without a job, which is why there is a grace period extended to students upon graduation. But recognizing how much you will have to spend each month is crucial.

Use facilities

Don’t spend money that you don’t need to while in college. Get in the habit of using school facilities, such as the library, the cafeterias and transportation as opposed to purchasing books, eating out and getting cabs. This will build responsible behaviors surrounding how you spend your money.

For more information on being a student and maintaining a balanced budget, reach out to us to discuss options for keeping positive credit.