4 Ways Students can build credit
Building your credit rating is important for the future, having a good credit rating can help with many aspects of your life, getting a loan when you need it as well as getting a good mortgage rate when you want to buy your first property. You can never start too early to generate a good credit rating, so we decided to look at how students could increase their credit rating.
- Have a bill put into your name. This may sound a bit drastic but since the days are gone when credit card companies throw applications at you and want every single student to have one of their credit cards, finance companies want to see some sort of history of how you manage money. One of the best to show a finance company that you can deal with money is to have your parents put a household bill in your name. Now before you panic, it does not mean that you have to pay the bill, it just means the finance company while doing their credit search on you will see that you have a financial history. This will enable you to have a higher chance of gaining you’re your first credit card that comes with low interest, and it will also help to increase your credit rating where you can build on it.
- A good way of building credit is to try and buy a product from a retail outlet on finance. If you can provide proof of income, then you have a high success rate of gaining credit that will help you will your long term goal of achieving a higher credit rating.
- Apply for your first credit card. If you have proof of income, it is wise to apply for your first credit card at the earliest possible moment to start building your credit history. By gaining a part time job before you become a student or while you are a student will give you proof of income. You can use this proof of income to apply for your credit card. It does not matter if you are applying for a higher interest rate for your first credit card; the most important thing is getting the first step on the ladder. So if you feel you may not get a good credit card with low interest then do not worry about applying for a credit card that is suitable for people with a limited credit history.
- Once you have your card, make sure you pay your balance off each month, by doing this you credit history will increase, allowing you to gain more credit and receive a higher credit rating.
By achieving a good credit rating as a student, it will allow you to gain credit cards with lower interest rates as well as better deals on mortgages.
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