An impressive credit score can open up a world of opportunities for you following your graduation, especially if you intend on buying a car, starting a business, or investing in a property within the next few years. Most students shy away from building credit while they are still at varsity for fear of landing themselves in debt. However, it is important to realise that not having a credit score to speak of can be just as detrimental as having a bad one.
The secret lies in being extremely cautious with your money and learning how best to manage your credit so that your credit score continues its upward trend. Here’s some advice.
Get a credit card
Remember to only do this if you know that you can resist the temptation to spend on items that you don’t need! When applying for a credit card, be sure to keep your limits low and never use any more than 30% of your available credit at any given time. Avoid making minimum payments. Instead, try to pay back the money that you owe in full at the end of the month. If you do this, there’s a good chance that you will enjoy credit that is interest-free. This will help to boost your credit score significantly over the years, too.
Open store accounts
Choose a few clothing stores at which you regularly shop and apply to open an account. Treat these accounts similarly to how you treat your credit card. Steer clear of using it to buy clothes with money that you don’t have.
The reason for opening an in-store account is simply to prove to banks and other financial institutions that you always pay back what you owe timeously and responsibly and that you never take advantage of the credit available to you. Try to put one or two items of clothing on your account every month and pay it all back in full before month-end.
By putting this advice into practice, you will emerge from your studies with a rather attractive credit score that will make applying for future credit endlessly easier. Remember, a credit score needs to be maintained, so ensure that you carry forth your new money management habits into your post-graduate life, and for the rest of your life.
In short, use credit sparingly, pay back what you owe quickly and in full, and avoid large purchases unless you are faced with an emergency.