How to Establish Credit for a Student

Establishing credit, especially for students, is important to establishing yourself as an independent person and for financial autonomy. Even if you do not have a lot of money, you can establish your credit. Most importantly, establishing a good credit history from the beginning can help you for years to come.

Things You'll Need

• Checking Account
• Credit Card
• Department Store Credit Card
• Co-signer/Guarantor if necessary.

Instructions

Establish Your Credit

1. Open a checking account. Most banks offer free checking accounts for students. Start an account at a bank that is nearest to your school and home. Also, choose a bank with many ATM locations to avoid fees.
   Be sure to get a debit card to use for this account. While having both will not improve your credit score, it will establish a credit history and show how well you manage your finances.

2. Apply for a credit card. Often on school campuses, there are vendors that offer credit cards with incentives like gift cards and free gifts. Be careful in selecting the right credit card for you. Ask questions about interest rates and credit limits. Some credit card companies offer special introductory rates for student-owned credit cards. Note that if you are approved, the credit limit will probably be minimal to begin with.

3. Apply for a department store credit card. Choose a store that you shop at frequently, as owning a card with that store will probably have the additional bonus of special discounts or additional sales for cardholders. Note that department store credit cards usually have the highest interest rates, so it's important to be aware of this when making purchases.

4. Ask someone close to you to be a co-signer or guarantor to help you establish credit. A person who does this for you should have good credit. If someone does become your co-signer, be sure not to take advantage of this and be sure to pay all bills on time, as your repayment methods affect both your credit and the credit of the co-signer.

5. Be responsible with your credit card usage. Do not charge more than you can repay. Make sure to pay at least the minimum each and every month. Make sure to pay your monthly bill on time each month as late fees are high and add to your credit card debt.
   Set up a plan to repay your credit cards in full. Try not to continue charging your credit cards until you have finished paying them off completely.

Tips & Warnings

• Keep good records for all of your credit cards. File statements and bills in folders and keep a record of all of your payments.

• Do not allow other people to use your credit card.

• Do not loan other people money by using your credit card to make purchases for them.