Wise Students Use Credit Cards to Build Scores Before Graduation
High credit scores will assist the student’s entry into the working world in many ways.
First, they will help them land that first job, because many employers do look at credit scores before hiring. Next, they’ll help them find a home or apartment to rent – because landlords check credit scores, too. After that, they’ll help with the ability to get a cell phone, sign up for cable TV, and of course, buy a car or a home.
Used as a tool, credit cards will help build those credit scores.
Start with one, use it carefully, and then in about 6 months, make application for another. Owning 2 or 3 cards that are reporting good things about you will help you enter the work world with high scores.
What is careful use? Use the card sparingly and charge no more than 30% of the card’s credit limit in any one month. Then pay it off each month when the statement arrives. Always pay on time, and if you absolutely can’t pay the entire balance, pay all you can – at least the minimum.
If you’ve had to go above the 30% for an emergency, go on line and pay the card back down to that level before your statement is issued. The amount that shows as owed on your credit report is the amount listed on the statement, so you can avoid going over that limit by paying early.
If you can’t get a card of your own, ask a parent or other financially responsible person to allow you to “piggyback” on his or her account. You’ll be added to the account and that person’s good financial activity will be reported to your account. You don’t need to have or use the card yourself unless they never do. The account does need to show some activity at least quarterly.
If you choose this route, be sure to choose wisely. Someone who charges more than the recommended 30% or who pays late will do you harm rather than good.
If you must, obtain a secured card with a credit card issuer who reports to the credit bureaus. Yes, you’ll be using your own money, but yes, you’ll be building your credit scores, and that’s what this is all about.
