Begin with a secured credit card One of the easiest ways students can start building a credit score is through a secured credit card, backed by a predetermined deposit. Since the bank is not taking large risk, even those with no work history or income can get one. Timely payments and utilization of credit below a certain level on these cards are made known to credit bureaus and contribute towards building a good credit history.
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Become an authorized user on a parent's card It is also possible for students to request to become an authorized user on a parent or guardian's credit card. This is when their name is associated with the account's credit history. As long as the parent has current payments and maintains low utilization, the student benefits from that good standing. It's a simple, risk-free means of creating a credit file before they get their own card.
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Use a student credit card if you qualify Some banks offer credit cards for students with lower credit limits and less stringent eligibility requirements. These are usually extended against an education loan or a savings scheme. Sensible use of one—settling the full bill on time without bills going into arrears—creates credit over a period of time, even though you do not have a steady source of income.
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Pay utility and mobile bills on time While not conventionally a part of a credit report, fintech companies and Indian credit bureaus have begun adding timely mobile postpaid, OTT, and utility bill payments to your credit behaviour more recently. Keeping these accounts in check reflects positively when you're applying for a loan in the future, especially through NBFCs or online lenders.
Build digital payment history with BNPL or UPI credit Products like Buy Now Pay Later (BNPL) or small-ticket UPI-linked credit lines allow students to pay later and buy now. These can be small but are reported to credit bureaus in the event of offer by regulated banks or fintechs. Paying back in full and on time inculcates the habit of dependability in your financial behaviour.
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Develop credit discipline early While students have a limited budget, learning how to manage credit responsibly at the very start will help them avoid potential dangers. Even a few months of impeccable behaviour—on an anchored card or restricted credit line—will leave a visible credit trail. That can help later on when students apply for education loans, post-graduation personal loans, or rent property that requires a credit test.
