8 Ways to Build Credit as a College Student

As a college student in your late teens or early 20s, you may not have much experience with using credit or building up your credit score. Establishing a credit history while you’re in college can have many benefits, including helping you rent an apartment, apply for car loans, or get lower interest rates on credit cards.

In this article, we’ll discuss how to build credit as a college student, including establishing credit for the first time, and ways to maintain a good credit score in college and beyond.

How to get started with credit as a student

If you’re a college student who has never used credit before and has no credit history, there are several ways to get started and establish a credit score for the first time.

1. Try a credit builder loan

Credit builder loans allow people with no credit history or bad credit to build a positive credit history. With this type of loan, you make payments upfront and are given access to the loan funds at the end of the term (minus any interest or fees). If you are approved for the loan, the amount you borrow is put into a secured savings account or certificate of deposit (CD) while you are paying off the loan. When you begin making your monthly payments, your lender reports these payments to the credit bureaus (Experian, Equifax and TransUnion). Once you have paid off the balance in full, you’ll be able to access the money.

This reduces the risk for the lender and allows you to demonstrate responsible credit habits by making on-time payments. Credit builder loans typically have limits of $1,000 or less.^[1]

This type of loan can be a good option if you need to build credit but can’t qualify for a traditional loan. As long as you make payments on time, they can help you build up your credit score, making it easier for you to apply for other types of credit in the future.

2. Become an authorized user

If you can’t qualify for your own credit account, becoming an authorized user on someone else's could help you build up your credit score. When you become an authorized user, another person (like a parent or other family member) adds you to their credit card account, meaning you can make purchases through their account, typically with your own card. However, the primary cardholder is still the one responsible for making payments on the account.

If the primary cardholder makes on-time payments and keeps their account in good standing, this can help your credit as an authorized user. However, if the primary cardholder makes late payments or has a high credit utilization, this can negatively impact your credit as an authorized user.

3. Use a rent reporting service

If you’re renting as a student, you might not be aware that your rent payments can be reported to the three major credit bureaus, Experian, Equifax, and TransUnion. This can positively impact your credit score as long as you’re paying your rent on time.*

Although rent payments aren’t automatically reported to the credit bureaus, there are a couple of ways you can have your rent reported:

• Your landlord may offer the option to report your rent payments on your behalf
• You can sign up for a rent reporting service - these often require a monthly subscription or an annual fee.
• Self offers a free rent reporting service that allows you to report your rent payments to all three credit bureaus, helping in your journey to building credit.

Getting a credit card as a college student

If you’ve never used credit before, getting a credit card as a college student might prove tricky. However, there are some options you can consider.

4. Student credit cards

As the name suggests, student credit cards are designed for college students to help them build good credit habits while in school. A student credit card works much the same as regular credit cards, but they might offer rewards tailored to students like cashback on purchases at retail stores or restaurants that students frequently visit, or rewards on school-related supplies. As student cards are typically easier for students with no credit to qualify for, they often have lower credit limits and higher interest rates than standard cards. ^[2]

5. Secured credit cards

A secured credit card is a type of credit card that requires you to pay a cash deposit, usually in a savings account or certificate of deposit (CD) as a security deposit. This cash deposit works as collateral for the account, reducing the card issuer’s risk when it gives you the credit card. Because of this, secured cards are usually easier to qualify for than standard cards. Secured credit cards can be a helpful tool for college students who have little or no credit history, as they give you the opportunity to start building credit.

As long as you manage your secured credit card responsibly, make on-time payments, and keep your credit utilization low, it can contribute to building your credit score. Once your credit score begins to build, you should find it easier to qualify for standard credit cards and other types of credit.

6. Get a credit card cosigner

If you’re having trouble being approved for a credit card as a college student, you could consider getting another person to act as a cosigner for you. This could be a trusted person like a parent or other family member, typically someone who already has a good credit history.

When you open a credit card account with a cosigner, you are still the primary cardholder and you are responsible for making on-time payments. However, if you miss any payments, your cosigner will be responsible for making the payment or possibly paying off the debt. This reduces the risk to the credit card issuer and makes you more likely to be approved. Not all credit card companies have the option of opening a credit card with a cosigner, so you might need to shop around.^[3]

Maintaining good credit during college and beyond

Building a good credit score and a positive credit history isn’t just about how you start, it’s about maintaining responsible credit habits and keeping track of your score to see where you can make improvements.

7. Have good credit habits

If you’re still getting started with credit or you’ve got your first credit account, practicing good credit habits is crucial, and will benefit you in the long run.

• Make on-time payments - When it comes to your credit score, your payment history is the most important factor, making up 35% of your score. Paying all of your bills on time is essential to maintaining a good credit score.^[4]
• Keep credit utilization low - Your credit utilization ratio indicates how much of your available credit you are using. The impact your credit utilization will have on your score will vary depending on many factors. Typically, keeping this figure low (ideally below 10%) can contribute to building and maintaining your credit score.^[5]
• Limit credit applications - Each time you apply for a new credit account, the lender will run a hard credit inquiry into your credit report which can temporarily lower your score. Too many hard inquiries could indicate that you are a higher-risk borrower if you have opened several credit accounts in a short period, and this could indicate that you are relying on credit to stay afloat. Try to only apply for new credit when you need it.
• Monitor your accounts - Keeping track of your credit accounts, checking for inaccurate information, being aware when your payments are due and making sure they are paid on time can help you build good credit habits.

8. Keep an eye on your credit report

Checking your credit report regularly can help you keep track of your credit accounts and help you spot potential issues like incorrect information or even identity theft. Being aware of your credit score and report can also help you track your credit-building progress and see areas you could improve on when it comes to credit management. You can access free weekly credit reports from Experian, Equifax and TransUnion via annualcreditreport.com. You can check your Equifax credit score for free at MyFICO, and some banks or credit card companies may also provide your credit score for free.

Frequently asked questions (FAQs)

Does college debt affect your credit score?

Yes, college debt from student loans can affect your credit score. Student loans are a type of installment loan, and they can impact your payment history, length of credit history and credit mix. Missing a payment on your student loan can have a negative impact on your credit score.

However, taking out a student loan when you start college can give you a longer credit history, even if you don’t take on other credit until later. This could have a positive impact on your credit history over time.^[6]

What is a good credit score for a college student?

There is no set credit score that is considered ‘good’ for a college student specifically, but a Good credit score on the FICO scoring system is between 670 and 739. The average credit score for someone aged 18-27 is 681 as of Q3 2024.^[7]

*Disclaimer: Results vary. You may not receive an improved credit score. Not all lenders use scores impacted by rent/utility payments.

Sources

1. Equifax, “What is a Credit Builder Loan?” https://www.equifax.com/personal/education/credit-cards/articles/-/learn/credit-builder-loan/
2. Equifax, “Student Credit Cards: What Are They and How to Get One” https://www.equifax.com/personal/education/credit-cards/articles/-/learn/student-credit-cards-what-are-they-how-to-get-one/
3. Discover, “What is a Cosigner for a Credit Card?” https://www.discover.com/credit-cards/card-smarts/what-is-cosigner-credit-card/
4. MyFICO, “How Are FICO Scores Calculated?” https://www.myfico.com/credit-education/whats-in-your-credit-score
5. MyFICO, “What Should My Credit Utilization Be?” https://www.myfico.com/credit-education/blog/credit-utilization-be
6. Citizens Bank, “How Do Student Loans Affect Your Credit Score?” https://www.citizensbank.com/learning/how-student-loans-affect-credit-score.aspx
7. Experian, "What Is the Average Credit Score in the US?" https://www.experian.com/blogs/ask-experian/what-is-the-average-credit-score-in-the-u-s/

About the author

Becca has over 10 years of experience as a content writer, working across various industries including finance, digital marketing, education, travel, and technology. Her work has been featured in publications including Forbes, Business Insider, AOL, Yahoo, GOBankingRates, and more.

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