How students can build strong credit early

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Building a strong credit history as a student sets the foundation for future financial opportunities, such as securing a car loan, renting an apartment, or even landing a job. Here are five practical strategies to help students establish and maintain good credit early.

1. Open a secured credit card

Secured credit cards are an excellent option for students with no prior credit history. These cards require a deposit, which serves as your credit limit, making them a low-risk way to start building credit.

How it helps: By using the card for small purchases and paying the balance in full each month, you’ll establish a positive payment history, which is the most significant factor in your credit score.

Pro tip: Choose a secured card that reports to all three major credit bureaus for maximum impact.

2. Become an authorized user

If a family member or trusted friend has a credit card with a solid payment history, ask to be added as an authorized user.

How it helps: You’ll benefit from their good credit habits without being legally responsible for the debt. This can help you build credit faster while learning responsible credit use.

Pro tip: Ensure the primary cardholder has a strong credit record before becoming an authorized user.

3. Make payments on time

Paying your bills on time is critical for building strong credit. Even one late payment can negatively impact your credit score.

How it helps: Timely payments demonstrate reliability to lenders and account for 35% of your credit score.

Pro tip: Set up automatic payments or calendar reminders to ensure you never miss a due date.

4. Keep credit utilization low

Credit utilization refers to the percentage of your available credit that you use. Aim to keep your credit utilization below 30% to show lenders that you’re managing your credit responsibly.

How it helps: Low utilization improves your credit score and makes you appear less risky to lenders.

Pro tip: Even if you pay your balance in full each month, try to use only a small portion of your credit limit throughout the billing cycle.

5. Start with a credit-builder loan

Credit-builder loans are designed to help individuals with no credit history establish a positive credit record. These loans require you to make monthly payments, which are reported to the credit bureaus.

How it helps: They not only build credit but also instil disciplined financial habits. Once the loan is repaid, you’ll also have access to the savings account created by your payments.

Pro tip: Check with local credit unions or community banks for affordable credit-builder loan options.

Final thoughts

Starting early with these strategies helps students establish a strong credit foundation, opening doors to financial opportunities later in life. By managing credit responsibly—through timely payments, low utilization, and smart financial choices—you’ll be well on your way to achieving excellent credit.