By Eddie Infante, for Experian
As students, we already have a lot on our plate – from staying on top of assignment due dates, working
(some of us full-time), all while trying to have some semblance of a social life. Building a credit history
and making sure your financial health is in good standing may be the last thing your mind. But, as you
prepare for post-college life, right now is the perfect time to start thinking about building your credit
history (if you haven’t already) so it’s there for you once you graduate.
I had the opportunity to sit down with Rod Griffin, Experian’s Director of Public Education. He shared
five things college students can do now to improve their financial health and prepare for life after
1. GET REAL WITH YOURSELF
- Before you start using credit, differentiate your wants versus your needs. Ask
yourself, is pizza and beer worth using your credit card for? Probably not. Are you
able to pay off this purchase soon? Or is it going to carry over month-to-month and
incur interest? If so, it’s probably a better idea to keep that card in your wallet.
Using credit without a plan in place to pay off your balances can cause long term
damage to your financial health.
2. START EARLY
- Start building your credit history and savings as soon as you can. Avoid surprises by
having a ‘rainy day’ fund in case of unplanned emergency costs. Your credit history
takes time to build. By starting early with something small like a secured credit card,
you can begin building your credit history. That way, you’ll have a credit history
when you need it later like when you apply for your first apartment, an auto loan
and, one day, maybe a house of your own.
3. USE CREDIT AS A FINANCIAL TOOL
- Debt is a financial problem, but credit can be a financial tool. Be intentional with
your spending habits and make your credit work for you. For example, if you’re
going to use credit for a purchase, apply for a card that offers rewards like cash back
or airline miles. If you do this responsibly, with a plan to pay off your balances, it can
help you save money in the long run.
4. CREATE A FINANCIAL GAMEPLAN
- An “I’ll deal with it later” mentality when it comes to unpaid loans or medical bills is
NEVER a good idea. Good financial habits you build in your 20s can follow you your
entire life. The bad ones can haunt you, too – especially when you’re getting a new
car, leasing an apartment and much more. Create a plan to avoid learning from
financial mistakes, which can take a long time to recover from. For example, look at
the interest rates of your cards and loans, then evaluate what needs to be paid
down immediately while always making all your payments on time. Missed
payments will hurt your credit scores more than anything else.
5. USE THE FINANCIAL TOOLS AVAILABLE TO YOU
- Use the resources available to build your financial health and your credit history.
Check your credit report regularly to understand where you stand from a credit
perspective. You can get a free report from all three credit reporting agencies once
a year by visiting annualcreditreport.com. If you’re paying your cell phone, utility
bills and/or your cable bills on time, Experian Boost is a free tool that can help
improve your credit scores . Adding these payments to your credit profile can build
your credit history and may help you access better credit offers. There’s a lot of free
educational content online including the Ask Experian Blog and their weekly
Good credit history is the key to many opportunities in adulthood, from renting a car to buying your first
home. By utilizing these tips now, while you’re still in college, you can start to build strong financial
health habits so that you’re in good financial standing and can access the credit you need, when you