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Building a Credit Score in College


It’s a catch 22. You go to college to improve your future career possibilities and obtain a diploma. Often times, the college student graduates without something that is vitally important in that very process – obtaining a good credit score.


Fortunately, credit card companies are creating good, effective credit card programs. Said another way, they are credit cards that don’t have a lot of fees. Having said that, as a parent you don’t want your college student to go out on their own and experiment with credit cards. Building a credit score in a controlled and supervised environment can be an effective process that kick starts a future with some good financial habits.


Today's college credit scores come with high-interest rates (no surprise) and low credit limits. Actually for the purposes of this exercise that is ok. The key is to use the card each month for items such as gas, food, etc, and then pay it off each month. The problem comes in when the student is late with a payment and or just makes the minimum payment. So here are a few parent tips for controlling the experience.


1) Have your son or daughter sign up for any of the college-based cards that have no fees


2) Have the statements mailed to the home address or set up with an electronic email under the parent’s email address. You could potentially get it set up with the statement going to two addresses or emails.


3) In this process, the parent pays the bill each month and sends the college student a copy of the statement with instructions to pay them back by the due date.


4) If the student is late with the payment back to the parent, then the parent adds $35.00 as a late fee to provide a valuable lesson in being late.


Most important double-check the credit card site to make sure everything is going as planned. IT also is a good idea to set up credit monitoring on your child to make sure they are not opening up any new accounts without you knowing. Protect them from themselves! Plus, it is a good teaching skill on how identity theft works.

Building up a credit score with positive credit activity is not that hard. Preventing mistakes is the key element in making sure your child reaches the goal of a good credit score!