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college finance

Adulting Student Life

How to Build Credit as a College Student

October 18, 2021

Going to college is all about learning, which includes your studies, but also gaining a better understanding of how to manage your finances. A key part of this is building your credit. 

According to Experian, the average FICO score — a type of credit score — in the U.S. in 2020 was 711, which falls into the good credit score range. Good credit can open up more financial opportunities during college and beyond, including more favorable loan terms and interest rates. 

If you want the benefits of having a healthy credit score, here are a few ways to help build your credit to above-average and excellent levels.

Apply for a student credit card

It can be difficult to qualify for certain credit cards when you’re starting to build credit, but student credit cards typically have less strict requirements. Even better, many of the best credit cards for students don’t come with annual costs and provide valuable benefits — which could include earning cash back on your purchases.

To find the right student card for you, consider the benefits and earning rates being offered. A card might be a good fit if its benefits and cashback bonus categories align with your spending habits and lifestyle.

Become an authorized user

You don’t have to apply and qualify for your own credit card to start building your credit. Many credit card companies allow for authorized users to be added to existing accounts. The account owner controls what the authorized user has access to, including having their own card connected to the account.

The benefit of becoming an authorized user is being able to build your credit with the help of the account owner. As long as the credit account is being used and paid off, you should see your credit start to grow. Talk with a family member or trusted friend about becoming an authorized user on their credit card account and whether it would make sense for you.

Use credit responsibly

An essential part of building and maintaining a healthy credit score is ensuring you always use credit responsibly. For example, it typically doesn’t make sense to carry a balance on a credit card because of high interest rates. Paying off your balance in full each month can help you avoid costly fees and interest charges and stay on track toward your financial goals.

It’s important to use credit responsibly so you can improve your credit score. Part of this includes budgeting for your monthly payments and making them on time — whether you open a credit card or take out a loan.

Add rent payments to your credit report

If you’re the type of person who has renters insurance and always pays rent on time, it could make sense to research and consider using a service to report your rental payment history. 

Rent payments aren’t often automatically included on credit reports, but certain services can help report your positive rent payments to different credit bureaus, which could boost your credit score. Since most college students are just getting started building credit, there’s no credit check for GradGuard’s Renters Insurance.

Consider a credit-builder loan

Apart from credit cards, you can also use loans, such as credit-builder loans, to help build your credit. With a credit-builder loan, a lender will typically add the proceeds to a secured savings account. You’ll make regular monthly payments toward the loan balance, and the money becomes available to you once you pay off the loan.

You have to pay some interest for the borrowed money, but this type of opportunity can be helpful if your options for building credit are limited. Many banks and financial institutions offer credit-builder loans.

Final thoughts

No matter your field of study, having a solid understanding of credit and its potential benefits can help shape your future financial decisions. And if you start building your credit now, you’ll pave the way for unlocking valuable financial opportunities down the road.

BIO: FinanceBuzz’sVP of Content, Tracy Odell, also held the same position at Student Loan Hero and has expertise in this subject, as well as all things related to college finances.

Adulting Student Life

Creative Ways to Map Out Financial Goals as a Student

May 7, 2021
Hand holding up money

As a student, you probably have plenty of financial goals in mind for your future. Having goals is a good thing, and it can keep you on the right responsible track to saving money and having enough to cover your expenses.

But, if your goals feel more like dreams or you haven’t thoroughly thought them out, you could have a harder time achieving them. 

Thankfully,  with a little creativity, you can map out your money goals and take charge of your finances from a young age.

With that in mind, let’s look at a couple of creative ways to map out those goals and how you can use them on your financial journey.

Have Fun With Budgeting

You might think of the word “budget” and groan. But, budgeting doesn’t have to be a tedious or boring practice. That’s especially true when you break down your budget into different categories to achieve your short-term, mid-term, and long-term goals.

You can separate your budget into these different areas by putting a bit away into each of them. Visualize it as having three jars set out on your counter. How much of your budget do you want to use right now? What about in a year or so? What about in 20 years? As a student, it can be hard to think about your life after retirement, but imagine how much you could have saved up if you do think about it now.

Some other examples of long-term financial goals include:

  • Paying off debt
  • Saving for a car
  • Striving for homeownership
  • Paying for college

Those goals might sound closer to home for a student. So, as tempting as it might be to use all your budget in the here and now, think about your future and all you can do with what you save. If you’re having trouble figuring out just how much you should be putting away, don’t be afraid to try a budget calculator. You’ll be able to play around with numbers to determine what will work for you.

Try Mind Mapping

If you’ve never heard of mind mapping, it focuses on having a central goal, then using different “branches” toward achieving it.

Sound confusing? It doesn’t have to be.

When you have a main goal, you can add “branches” to your map in different directions. Each branch will be another tactic you can use toward achieving that goal. For example, if your goal is to save up enough money for a car, one area of your map might include things like working extra jobs, selling some of your unwanted items, or taking on “gig work.” Another section might include giving up things like going out to eat or entertainment until you have enough.

Mind mapping is even easier when you use software to build your map. Visualization is important when it comes to achieving your goals. It gives you something concrete to look at and focus on while you put in the work.

It’s never too early and you’re never too young to create financial goals for yourself. Doing so now can set you up for a much more comfortable future. Keep these creative ideas in mind as you start to work through those goals as effectively as possible.

BIO: Dan Matthews is a writer with a degree in English from Boise State University. He has extensive experience writing online at the intersection of business, finance, marketing, and culture.