A young college student smiles at a credit card in one hand while holding a mobile phone in the other

How to Build Credit as a College Student

Last Updated: January 11, 2024
6 min read

Key points about: building credit as a college student

  1. Because your credit score may impact where you live and work, the sooner you can start building credit history, the better.

  2. You can start building credit history through the responsible use of a student card or a secured card.

  3. You can practice good credit management by paying your bill on time and keeping credit card spending low.

Having a good credit score can impact many areas of your life, including where you work and live, and if you may be approved for a new line of credit, like a credit card. The good news? It’s never too early to start establishing a credit history.

Importance of building credit as a college student

Your credit score can influence many different areas of your life. While having no credit history isn’t the same thing as having poor credit, a lack of credit history or a low credit score can affect your ability to buy a car or rent an apartment.

If you build your credit history while you’re in college, you may be more prepared to make important decisions once you finish school.

Whether you live off-campus as a student or plan to rent an apartment after graduation, a higher credit score may give you more choices. It can be harder to get an apartment with no credit history or poor credit unless you have a cosigner. A low score may also make it more expensive to rent if the landlord requires a larger security deposit to get approved.

Some jobs may require a credit check before starting your role. A low credit score could impact your ability to get hired.

You might not be considering buying a home anytime soon, but building a good credit history will help you if you decide to purchase one in the future. Generally, it’s easier to get a mortgage (or home loan) if you have a good credit score.

A good credit score may help you qualify for an auto loan and help you get a lower interest rate. In general, the better your credit score, the lower your interest rate will be, and a lower interest rate usually means a lower monthly payment.

Ways of building credit as a college student

One way of building a credit history is with a student card. Student credit cards are designed for college students. Student cards typically have low limits and come with rewards programs that may help students earn rewards on their everyday purchases.

Another option is to apply for a secured card. A secured card is like any other credit card, but your credit card company will require you to put money down as your deposit. Your deposit is usually equal to your credit limit. For example, if you put down $200 to open a secured credit card, your credit limit will typically be $200, too. It’s crucial that you make regular, on-time payments on your secured card and keep usage low because most credit card companies report your activity on secured cards to the credit bureaus.

Did you know?

A Discover® student card lets you earn great rewards while you build your credit with responsible use.1

Things that can damage your credit as a college student

Using your credit card as income

It’s important to remember that while credit cards might help you pay for things during the month, they’re not a second source of income. If you get approved for a $1,000, it isn’t a $1,000 payday. You will eventually have to pay the money back.

You may be responsible for fees that come with your credit card, on top of repaying the purchases that you make with it. For example, some credit cards have an annual fee or foreign transaction fee charges (if you use your card in countries other than the United States or purchasing from a merchant outside the U.S.) that you may also have to pay.

It’s best to only make purchases on your credit card that you can afford to pay off at the end of the month.

Missing your credit card bill due date

It can be challenging to keep track of your payment due date when you are new to credit cards. Your payment history makes up 35% of your credit score, so it’s important that you pay your bill on time.

If you miss even one payment, it can impact your credit rating. If you continue to miss payments, you may seriously damage your credit score and get hit with late payment fees.

Maxing out your credit card

The cost of college is expensive, and not just tuition. As a college student, you might also have school fees like housing, transportation, technology, and more. For many, it may seem easy to charge everything on your student credit card, and run the risk of maxing out your card and carrying too much credit card debt. This isn’t a great way to build credit history.

Maxing out your card means that you’re at or near the credit limit for that card. For example, if you owe $500 on a card with a $500 limit. And even if you don’t spend all of your available credit, when you carry a high balance on your credit card you also put your credit utilization ratio at risk. A good rule of thumb is to use less than 30% of your available credit on any credit card you have.

Credit card debt is the balance owed across all your credit cards and can become a problem when you have more debt than you can reasonably pay off. If too much debt leads to late payments, it could hurt your credit score. And a poor credit score can lead to a penalty interest rate, which can make your credit card debt even worse.

Tips to manage your credit as a college student

Don’t apply for too much credit

Student credit cards or secured credit cards start with a lower credit limit. While it can be tempting to get more cards to increase the amount of money you can spend, it’s a good idea to limit the amount of credit and number of accounts you have available to you.

For one thing, it’s easier to keep track of your payments and avoid credit card debt when you have fewer cards. Secondly, every time you apply to open a credit card account, it may result in a hard inquiry on your credit report. Too many new account inquiries on your account may be perceived as a red flag, and lenders may think that you’re taking out more debt than you can handle.

Pay your bill on time

When you pay your credit card bill after the due date, you may incur late fees and other penalties for missed payments. Additionally, these late payments may be reported to the credit bureaus and have a negative impact on your credit score, according to the Consumer Financial Protection Bureau. To help make sure your credit card bill is paid on time, you can set up automatic credit card payments as your credit card issuer allows.

Keep your credit card use low

You should keep your credit card usage (credit card utilization) low, preferably under 30%.

Monitor your credit card account

You’re more likely to keep track of when your bill is due, how much you’re currently spending, and the charges you make on your account when you monitor your credit card account. For most credit card companies, you can easily view your account online or by mobile app.

Another important reason to monitor your account is to be aware of any unusual activity. Unfortunately, credit card fraud can happen. You’re more likely to catch and report fraudulent charges when you regularly check your credit card account activity.

Check your credit report

Your credit report is a document that gives a history of your credit activity. It’s important to check your credit report to get an idea of your credit history and help you detect anything that looks amiss.

The good news is that as a college student, you can get a head start on credit by developing good habits. One of the most essential factors in building credit is the length of your credit history. So, the sooner you start your credit-building journey with responsible habits, the better off you’ll be.

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  1. Build credit with responsible use: Discover reports your credit history to the three major credit bureaus so it can help build/rebuild your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build/rebuild credit.
  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.