Improving your credit score as a student
As a student, money is always going to be tight and it’s always going to be of paramount concern. Unfortunately, however, you probably haven’t had much of a chance to build up a decent credit score. This means getting approved for a decent line of credit can be quite difficult.
Building a good credit score is something that will prove invaluable later in life as you start to make those “big” purchases like cars and holidays. Because it’s always more secure to make a big purchase with a credit card than with your debit card. Not only are you covered in case something goes wrong but the more credit you use the better your credit score will be.
What does a credit score show?
A credit score lets lenders know what kind of borrower you are and how reliable you are when it comes to borrowing and repaying. It’s effectively a record of your credit history and will apply whether you’re applying for finance or for a new credit card. The higher your credit score, the lower the risk you pose to lenders.
Student credit scores – Everything you need to know
If you want to start building a credit score and you’re currently studying at university or college. Here are a few tips you might want to consider.
Student overdrafts – If you go into your student overdraft then it will appear on your credit report. However, as long as you pay it back before it becomes too much of a burden it shouldn’t leave much of a stain.
It’s also handy to know that your student finance loans do not affect your credit score and will not appear on your credit report.
Get official – Improve your score by making sure you’re on the electoral register and by getting a phone contract under your name to prove you can make payments on time as well as bills. Taking out a student credit card is also a great way to get on the credit ladder. Getting a personal loan as well can help too as this shows you can borrow and repay.
Keep making payments – If you’ve been able to successfully apply for a credit card or loan, ensure that you’re paying regularly. There are loans available for students with bad credit that you can use if you require funds before your next student finance loan installment. However, always do your research before applying and remember to pay these back on time.
Negative information regarding financial habits can appear on your credit report for 6 years so avoid making late payments or taking out credit cards that you cannot afford.
Only apply once – Finally, if you are rejected for finance or for a new credit card don’t keep on applying. Multiple rejected applications will be recorded and will not help your situation at all. Follow these tips and your student credit score should be flying high in no time.
