When you turn 18, you have a chance to build good credit – but unfortunately, many college students don't have very good habits and end up spending their 20s an 30s trying to repair early credit mistakes. Here are ten tips you can use to ensure that you don't fall into the trap of ruining your credit before you barely get out of the gate:
1. Avoid signing up for credit cards advertised for students. They might not be the best choice. Do your research to find the card with the best rewards problems, the best interest rate, and a limit that won't tempt you to overspend.
2. Only charge what you can pay off every month. Don't let interest rack up by paying only the minimum every month.
3. Avoid being late with bills at all costs. Just one or two late payments can destroy your credit when you don't have much of a history.
4. Open at least one credit card. You don't want to make the mistake of not having any credit. No credit is almost as bad as bad credit.
5. Check your credit report once a year. You can do so for free and this will alert you to any mistakes that might be pulling down your credit score.
6. Talk to a debt counselor at your school. He or she can help you figure out student loans, budgeting, and more – and at most schools, this service is completely free.
7. Defer your student loans before you default. Most student loans give you a grace period where you don't have to pay back the loans until after you graduate and have three to nine months to find a job, but it depends on the program. You might have to manually ask them to defer. Do this before you're in the weeds trying to make payments!
8. Avoid putting every bill in your parents' name. Again, it pays to build good credit. Car loans, apartment utilities bills, and other accounts open under your name will help you in the long run.
9. Consider opening a store card. These are like credit cards, so you'll build good history by paying it off every month, but since you can only use it at one store, you won't be as tempted to spend large amounts every month.
10. Sit down and actually write out your monthly budget. How much money do you make every month? How much goes toward fixed bills? The left over is the amount you can spend – and not a penny more. To be most responsible, try to put some of that extra money into a savings account instead of spending it all.
Figuring out a responsible money plan isn't easy. When in doubt, ask for help. Don't get in over your head because you'll pay for those mistakes later!
This guest post is from Allison with CreditScore.net, where you can go to learn more about building good credit and get a free credit score report.
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