Building Credit: 4 Tips for Your College Student

Taking small, simple steps to build credit early in life can pay off big later on.

Building credit is increasingly important, from securing a loan to finding an apartment to starting a new job. Beginning the credit-building process while still in college isn’t just a good idea; it’s now almost crucial to starting off on the right financial foot.

For years, one of the easiest ways to build credit while in college was having a credit card and using it responsibly. With new restrictions on credit cards under the Credit Card Accountability, Responsibility and Disclosure Act, it’s become much tougher for anyone under 21 to qualify for a credit card. Minors must prove they have sufficient income to make payments or get a parent or guardian to co-sign.

Fortunately, there are still plenty of ways you can help your college student begin building a solid credit history. Make sure your student understands the importance of regularly reconciling his or her account, as well as proper procedures for reporting a lost or stolen ATM or debit card.

Share with your student your own system for scheduling and paying bills, and repercussions of late payments. Help them understand the impact of late payments and over-the-limit spending on credit history. Check out our other tips to help students begin building credit the right way: