Author Topic: How can a college student build credit?  (Read 4021 times)

SimpleSpartan

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How can a college student build credit?
« on: October 12, 2016, 04:40:44 PM »
Background- I am a college student that works aprox 30 hours a week at $13hr which has allowed me to save about $15,000 if you include high school and my freshman year. While I save a lot, I do spend a good chunk on entertainment with friends ,dates, and gas.

Problem?- I don't have a credit score, and cant seem to find a good credit card that will lend to me, and feel like I am missing out on the travel rewards that could be used for flying to see friends currently enrolled out of state. Both my siblings squandered my parents generous education package and walked away with cc debt and student loans, so my parents are quite fearful and have offered little help.

Proposed solution so far by my friend, "Get a car loan and make the payments," meh 98 Honda accord runs and drives great plus it has leather.



BigHaus89

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Re: How can a college student build credit?
« Reply #1 on: October 12, 2016, 04:43:59 PM »
You definitely don't want to get a loan just to "build credit."

If you think you can avoid racking up credit card debt, start applying for cards at credit unions and banks. You will unlikely get a cashback or mileage card though. When I was in college, I had a card with like $1000 limit or something that I would pay rent, utilities and groceries with. Try starting there.

SimpleSpartan

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Re: How can a college student build credit?
« Reply #2 on: October 12, 2016, 04:47:20 PM »
You definitely don't want to get a loan just to "build credit."

If you think you can avoid racking up credit card debt, start applying for cards at credit unions and banks. You will unlikely get a cashback or mileage card though. When I was in college, I had a card with like $1000 limit or something that I would pay rent, utilities and groceries with. Try starting there.

I guess I better start there then, thanks!

Bracken_Joy

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Re: How can a college student build credit?
« Reply #3 on: October 12, 2016, 04:50:17 PM »
Two things: a credit card. If you need to, you can get a secured card. https://www.nerdwallet.com/blog/top-credit-cards/nerdwallets-best-secured-credit-cards/

The second thing, I think you can ask your landlords, or anyone you pay recurring bills to, to report your payment status to credit agencies. Obviously only do this if you pay on time. http://www.experian.com/rentbureau/rental-payment.html https://www.nerdwallet.com/blog/finance/credit-report-rent-payments-incorporated/

notactiveanymore

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Re: How can a college student build credit?
« Reply #4 on: October 12, 2016, 08:14:04 PM »
When I was 19, I got a credit card through the bank where I had a checking account. I had a $1000 limit back then and I would put tanks of gas on it and then pay it off each month. My credit score quickly grew to over 700. Other than that card (which now has a 15k limit and which I still only use for gas), I had one store credit card for a few months with no balance and I shared a 0% travel credit card with my now-husband which we booked our honeymoon expenses on then paid off and cancelled within 8 months. My score is about 780 right now. It even got up to 830 at one point when we were actually using the travel card. 

Definitely don't just buy a car. People have some really wacky ideas about how to get good credit scores. I've never paid a penny of interest (well, aside from the interest on my husband's 55k in student loans lol) and just kept things manageable and paid everything early/on-time each month and my score is above any "high-score" threshhold I might encounter. Installment loans are not necessary to build a good credit score. On-time management of your credit over several years with a low percentage of available credit used will get you where you need to be.

Unless you're able to really put a lot of recurring and necessary expenses (not things you buy just to get points) on a travel credit card, it is going to be difficult to earn any really useful amount of cashback or travel points or whatever. With your current lifestyle, I'd focus on just learning how to budget and making savings goals for things like traveling.

Tiger Stache

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Re: How can a college student build credit?
« Reply #5 on: October 12, 2016, 08:35:29 PM »
Do they still have those tables on campus enticing people to sign up for credit cards in exchange for a tshirt?

I wouldn't worry about needing a credit score so much. Could you get added to one of your parents' cards as a authorized user? That may help you get a secured card too.

Metric Mouse

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Re: How can a college student build credit?
« Reply #6 on: October 13, 2016, 12:48:17 AM »
Do they still have those tables on campus enticing people to sign up for credit cards in exchange for a tshirt?

I wouldn't worry about needing a credit score so much. Could you get added to one of your parents' cards as a authorized user? That may help you get a secured card too.

It was free burritos where I went. Can't be that hard for a college student to get a credit card.

kmb501

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Re: How can a college student build credit?
« Reply #7 on: October 13, 2016, 03:03:05 AM »
Background- I am a college student that works aprox 30 hours a week at $13hr which has allowed me to save about $15,000 if you include high school and my freshman year. While I save a lot, I do spend a good chunk on entertainment with friends ,dates, and gas.

Problem?- I don't have a credit score, and cant seem to find a good credit card that will lend to me, and feel like I am missing out on the travel rewards that could be used for flying to see friends currently enrolled out of state. Both my siblings squandered my parents generous education package and walked away with cc debt and student loans, so my parents are quite fearful and have offered little help.

Proposed solution so far by my friend, "Get a car loan and make the payments," meh 98 Honda accord runs and drives great plus it has leather.

Have you tried online? Amazon, PayPal, and some of the other online shopping companies offer pretty manageable credit cards. You could also just try signing up with a favorite store, like Macy's. Definitely don't put a lot on these cards. I usually just use mine when I don't feel like entering my debit card number; it's never in excess of what I was planning to put on my card anyway, though. I pay the balance off early, if possible, like a few weeks after it gets put on. Sometimes I even pay excess so that I have a payment in reserve. Don't buy a car if you don't need it. They tried to get me to rent a car on a long-term lease, but that makes almost no sense to me. The only way I could see that working is if I could somehow use the car to make money, like with Uber or Lyft. Now, I'm probably going to have to do something along those lines, because my current car is costing me about as much in repairs as paying car payments, so it's not really worth keeping. If yours isn't in that condition, though, there's no need to get anything new. You really don't want the hassle of paying payments.

A low-interest student loan might provide you with the credit score boost you need, but be careful. Student loans can eat you alive if you use them like most students, including me, have done. Use common sense if you go this route. Borrow only what you can pay back. Use early payments on loans to boost your credit score. It will work. Before my loans went into forbearance my credit score was excellent. It's also pretty easy for students to get loans, regardless of financial need. Treat them like any other loan, pay your debts early, and you should see your credit score go up pretty high. Mine did. Don't do like I did, though. I borrowed more than I could pay back and borrowed higher interest loans than I should have, because I didn't do my research. I was also super-shy and didn't get a job during college. I wish I had it to do over again.

coffeehound

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Re: How can a college student build credit?
« Reply #8 on: October 13, 2016, 02:35:45 PM »
Where do you live? Are you in an apartment? Is your name on the utility bill? Wireless/cable bill? If so, you are building credit right now.

  You don't necessarily need a credit card to build credit, though getting one and using it sparingly, then paying it off every month, will help build your credit score.

galliver

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Re: How can a college student build credit?
« Reply #9 on: October 13, 2016, 03:23:40 PM »
Can't believe no one has thought this, but if you've applied to a couple cards and haven't been approved for anything, have you checked your credit report? Seems worthwhile to make sure everything is ok and fraud isn't sabotaging your applications.

My other thought is that you say you're applying for "good" cards; maybe you're overreaching. The first card I got myself was a Discover Student card; perfectly normal card but started with a lower limit and didn't seem fazed by my minimal credit history. Disclaimer: my dad had put me as a user on one of his cards for a few months or a year prior, and I think that helped my credit some to start; but it sounds like that isn't an option.

GizmoTX

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Re: How can a college student build credit?
« Reply #10 on: October 13, 2016, 03:32:07 PM »
Get a major credit card (affiliated with Visa or MasterCard) with a low credit limit to start & hopefully a cash reward program -- look for "student" cards. A good source is the bank where you have your checking account; if you don't have one, get a college checking account with no monthly fees. Or an Amazon CC. Otherwise, do not get a store credit card -- it isn't very versatile & doesn't build credit like a major will. If you absolutely cannot find any lender that will open a card for you, see if you can be added as an authorized user on a parent's card.

Use your CC instead of a debit card -- it's much safer AND builds your credit history. Only charge what you can completely pay off every month & pay your balance in full before it's due -- you shouldn't care about the annual percentage rate because you are never going to pay it. After a year or so, you should be able to add a second card with better rewards.

Lis

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Re: How can a college student build credit?
« Reply #11 on: October 14, 2016, 07:51:33 AM »
When I was in college I bought all of my books second hand (or third hand, or fourth...) on Amazon. If you can get an Amazon Visa, that'll save you an extra 5% on anything Amazon related. However, I only recommend this if you are 100% sure you will control your spending (i.e., only use it for necessities, pay it off every month, etc.). If there's any part of you that think you might not be able to handle that yet, don't do it.

Bracken_Joy

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Re: How can a college student build credit?
« Reply #12 on: October 14, 2016, 08:00:57 AM »
When I was in college I bought all of my books second hand (or third hand, or fourth...) on Amazon. If you can get an Amazon Visa, that'll save you an extra 5% on anything Amazon related. However, I only recommend this if you are 100% sure you will control your spending (i.e., only use it for necessities, pay it off every month, etc.). If there's any part of you that think you might not be able to handle that yet, don't do it.

I'm pretty sure the amazon visa is only 3%? Did it used to be different?

Lis

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Re: How can a college student build credit?
« Reply #13 on: October 14, 2016, 10:51:23 AM »
When I was in college I bought all of my books second hand (or third hand, or fourth...) on Amazon. If you can get an Amazon Visa, that'll save you an extra 5% on anything Amazon related. However, I only recommend this if you are 100% sure you will control your spending (i.e., only use it for necessities, pay it off every month, etc.). If there's any part of you that think you might not be able to handle that yet, don't do it.

I'm pretty sure the amazon visa is only 3%? Did it used to be different?

Nope - 5% : https://www.amazon.com/iss/credit/marketingauth?pr=conplcc&ref=storecard_van&plattr=storecard_van

I've had the card for about two years now and it's been 5% as long as I've had it. Not sure if/when it had been 3%. I did sort of misspeak though - it's only 5% if you buy anything directly from Amazon, so if you buy something (like a textbook) through Amazon from a third party vendor, the purchase isn't eligible.

Bracken_Joy

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Re: How can a college student build credit?
« Reply #14 on: October 14, 2016, 11:00:21 AM »
When I was in college I bought all of my books second hand (or third hand, or fourth...) on Amazon. If you can get an Amazon Visa, that'll save you an extra 5% on anything Amazon related. However, I only recommend this if you are 100% sure you will control your spending (i.e., only use it for necessities, pay it off every month, etc.). If there's any part of you that think you might not be able to handle that yet, don't do it.

I'm pretty sure the amazon visa is only 3%? Did it used to be different?

Nope - 5% : https://www.amazon.com/iss/credit/marketingauth?pr=conplcc&ref=storecard_van&plattr=storecard_van

I've had the card for about two years now and it's been 5% as long as I've had it. Not sure if/when it had been 3%. I did sort of misspeak though - it's only 5% if you buy anything directly from Amazon, so if you buy something (like a textbook) through Amazon from a third party vendor, the purchase isn't eligible.

Ah, see, we have this one: https://www.amazon.com/Chase-Amazon-com-Rewards-Visa-Card/dp/B007URFTYI Hence my confusion. I'll have to look and see how many of our purchases would qualify, if it's worth making the switch!

Lis

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Re: How can a college student build credit?
« Reply #15 on: October 14, 2016, 11:29:07 AM »
When I was in college I bought all of my books second hand (or third hand, or fourth...) on Amazon. If you can get an Amazon Visa, that'll save you an extra 5% on anything Amazon related. However, I only recommend this if you are 100% sure you will control your spending (i.e., only use it for necessities, pay it off every month, etc.). If there's any part of you that think you might not be able to handle that yet, don't do it.

I'm pretty sure the amazon visa is only 3%? Did it used to be different?

Nope - 5% : https://www.amazon.com/iss/credit/marketingauth?pr=conplcc&ref=storecard_van&plattr=storecard_van

I've had the card for about two years now and it's been 5% as long as I've had it. Not sure if/when it had been 3%. I did sort of misspeak though - it's only 5% if you buy anything directly from Amazon, so if you buy something (like a textbook) through Amazon from a third party vendor, the purchase isn't eligible.

Ah, see, we have this one: https://www.amazon.com/Chase-Amazon-com-Rewards-Visa-Card/dp/B007URFTYI Hence my confusion. I'll have to look and see how many of our purchases would qualify, if it's worth making the switch!

Aah sneaky! I buy quite a bit on Amazon and usually through Amazon directly (hello, cat food and litter), so the 5% is worth it for me. Elsewhere I use the AMEX Preferred Every Day, which has 6% groceries, 3% gas, and 1-2% on other stuff. My Amazon card gets used pretty much exclusively on Amazon or the few places AMEX isn't accepted.

Bracken_Joy

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Re: How can a college student build credit?
« Reply #16 on: October 14, 2016, 11:33:26 AM »
When I was in college I bought all of my books second hand (or third hand, or fourth...) on Amazon. If you can get an Amazon Visa, that'll save you an extra 5% on anything Amazon related. However, I only recommend this if you are 100% sure you will control your spending (i.e., only use it for necessities, pay it off every month, etc.). If there's any part of you that think you might not be able to handle that yet, don't do it.

I'm pretty sure the amazon visa is only 3%? Did it used to be different?

Nope - 5% : https://www.amazon.com/iss/credit/marketingauth?pr=conplcc&ref=storecard_van&plattr=storecard_van

I've had the card for about two years now and it's been 5% as long as I've had it. Not sure if/when it had been 3%. I did sort of misspeak though - it's only 5% if you buy anything directly from Amazon, so if you buy something (like a textbook) through Amazon from a third party vendor, the purchase isn't eligible.

Ah, see, we have this one: https://www.amazon.com/Chase-Amazon-com-Rewards-Visa-Card/dp/B007URFTYI Hence my confusion. I'll have to look and see how many of our purchases would qualify, if it's worth making the switch!

Aah sneaky! I buy quite a bit on Amazon and usually through Amazon directly (hello, cat food and litter), so the 5% is worth it for me. Elsewhere I use the AMEX Preferred Every Day, which has 6% groceries, 3% gas, and 1-2% on other stuff. My Amazon card gets used pretty much exclusively on Amazon or the few places AMEX isn't accepted.

The AmEx preferred is our other main card too.

And in fact, after looking at it, we went and got the amazon store card. Thanks for the clarification on that. 2% more back =)

Lis

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Re: How can a college student build credit?
« Reply #17 on: October 14, 2016, 01:19:03 PM »
*snip*

The AmEx preferred is our other main card too.

And in fact, after looking at it, we went and got the amazon store card. Thanks for the clarification on that. 2% more back =)

Yay! You're welcome :)

Bracken_Joy

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Re: How can a college student build credit?
« Reply #18 on: October 14, 2016, 01:24:47 PM »
*snip*

The AmEx preferred is our other main card too.

And in fact, after looking at it, we went and got the amazon store card. Thanks for the clarification on that. 2% more back =)

Yay! You're welcome :)

Plus it gave us $40 credit for sign up, so that's great too!