Tips to pass your credit score with flying colors while in college

Date: August 13, 2018

No one ever said that college was cheap. In fact, many of the largest expenses have nothing to do with tuition — and no, we’re not talking about pizza.

Everything is expensive and the financial choices students make during these years will impact the rest of their lives. That’s why it pays to have a plan for the upcoming year and thereafter, both academically and financially.

Before you or your student heads off to college this semester, keep these tips from VantageScore Solutions in mind.

1. Be smart with loan applications

student loan application

Student loans are a college mainstay but if they are handled improperly, that could hinder your financial future. In most cases, your applications for student loans will have only a limited impact on your credit score, but to be safe, learn all you can about any loan before applying for it. And once you do apply, consolidate your applications in the same two-week time frame to minimize any negative impact. Consolidating your applications is important because the algorithms that calculate your credit score will view that additional activity favorably as an indication that you were shopping for the best rate and account.

2. Your textbook choices could make a difference

student getting textbooks

Does buying or renting your textbooks really matter to your credit score? In short, it can. Failure to return a rented textbook or even returning it late can lead the lender to send the account to collections. If your credit report shows an account sent to collections, that item could have a negative impact on your credit score. To prevent this, either buy your books if you can or if you choose to rent, be sure to return the books on time. The ramifications of a late return could be much more severe than you would expect.

3. Build your credit history smartly

buying books with credit card

If you’re 18 and over, every college transaction is a chance to build and enhance your credit history and you should treat them as such. Pay your bills on time, especially those with your name on them, such as utilities. Limit yourself to a single credit card, don’t miss payments and avoid maxing it out. You should also try to pay off the entire balance each month to make sure your money goes to good use and you don’t waste it on interest payments.

4. Save money wherever you can

student in dorm room


those bills off will be a lot easier to do if you have the money.

Making sure that you have sufficient funds starts with you setting a

budget and making smart financial decisions around campus. When you set a

budget for yourself make sure this budget is based on your net income

(what you bring home after taxes) rather than your gross income (what

you earn before taxes). This will give you a more accurate understanding

of the money you have to spend. To support this budget you can also

serve as a resident adviser (RA) to earn extra money and/or free room

and board. And if you’re not an RA, don’t be afraid to have a roommate

and to buy used books or furniture. Finally, cut down on unnecessary

dining experiences by eating at home when you can. It may not be as

exciting, but you’ll be thankful for the extra money.

5. Realize the decisions you make will impact your future

college graduates taking selfie

In most cases, the student loans you had taken out will start payments when you leave college. You needed those loans to pay your tuition bills, but they can now quickly damage your credit score if you miss a payment. Be mindful of your expenses — current and ongoing — and pay every bill in full and as quickly as you can. The sooner your loans are paid off, the sooner you can put that money toward the other things that the world after college has to offer.

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