Why you should work on building your credit in college

Posted by Lindie Johnson on Aug 20, 2017 10:48:00 AM

Setting off for college gives you a fresh start and renewed energy. You'll have the opportunity to get involved in a new social scene, begin living independently, and have the chance to establish your personality as a young adult. In the midst of this exciting time, it's important to remember that the main purpose of your college career is to lay the framework for your future. This framework goes beyond academics and career planning. By living independently, you now will have the responsibility of managing your finances.


Having an understanding of personal finance and credit will help lead you down a path to a healthy financial future. Credit, in particular, will play a major role in just about every major aspect of your adult life. Mistakes you make in college can affect you for many years to come. Don't get your credit off to a bad start in it's infancy. Your finances are frankly, quite easy to ruin, and very difficult and time-consuming to rehabilitate. It is of utmost importance to work on building your credit in college for many reasons.

Aim High

A person with a high credit score has a major advantage over someone with poor credit. Having good credit means that you will most likely get lower interest rates on loans which translates into lower monthly payments for years to come. Car loans, mortgages, students loans (and education loan refinancing options), and credit cards all potentially come with lower interest rates when you have good credit. That means less money wasted on finance charges and more in your pockets.

A Roof Over Your Head

Everyone needs shelter to survive. Your credit history can determine whether you are able to scoop up the apartment that all of your friends have been admiring for years. Property owners and apartment complex management want to ensure that they will get their rent. Your credit history is a good indicator of whether or not you can be expected to reliably pay rent on a consistent basis and on time. Don't let late monthly payments and collection accounts be the reason you are turned down for your ideal rental choice. Later in life, your good credit will be key to achieving the goal of home ownership.


You may be wondering, "what does my credit have to do with my work ethic"? The answer to that question in the eyes of many potential employers is "a lot". Employers are increasingly doing credit checks as a part of the hiring process. A glowing credit history conveys to an employer that the candidate has good character and is responsible in their decision making as it pertains to finance. Employers want to increase the chances of hiring quality candidates and all other things being equal, someone with solid credit will win over someone with a mediocare history every time.

Establish good credit now by keeping your revolving account (credit card) balances low, making your payments on time, and always being mindful of credit decisions. Even though you may not see it now, the health of your credit can determine your very livelihood. Get it right from the start and establish good credit in college.

Topics: Financial Education for Students