How to Start Building Credit in College
Building credit is something most college students know they need to do. Establishing a credit history and having good credit are musts for becoming financially independent – without it, it can be very difficult to qualify for loans, rent an apartment, and even get certain jobs – but knowing where to start can be confusing. We break down some simple strategies on how to start building credit below.
How do you build credit?
Become an authorized user on your parents’ credit card account
Simply put, being an authorized user on your parents’ account basically means you’re using their credit card, but you have your own card with your name on it. When you’re building credit, this the best of both worlds. You can buy things on the card like it’s yours, but it’s still the primary cardholder’s legal responsibility to pay for the charges. You might have to pay your parents back, but hey, you’ve got plastic!
As long as your parents maintain a good credit history by making on-time payments without carrying a large balance, your credit report will get a boost. The credit card company should report the account activity to both your and your parents’ credit profiles, but you can always check first to see if the credit card company reports authorized user accounts to credit reporting agencies.
Apply for a secured credit card
If you know you’ll always be able to pay off the balance every month, think about applying to get your own secured credit card. A secured credit card requires you to put down a cash deposit (usually equal to the same amount as your credit limit on the card) to open an account, reducing risk to the credit card company. Like being an authorized user on someone else’s credit card, this is a good way to build credit, and the required deposit makes it easier for people with a short credit history (or bad credit) to open an account.
A good tactic when getting your first credit card is to use it only for small purchases (like gas or your Netflix subscription), then pay the balance off in full every month. Avoid the urge to splurge to prevent your credit balance from ballooning to an amount you can’t afford to pay back.
Credit cards aren’t one size fits all, so make sure you do your research before you apply for one. Things like annual fees, interest rates, and credit limits can vary from card to card. It’s important to know what you’re getting into before you sign up.
Apply for a student loan
As a college student, you might already have student loans, and the good news is, they’re helping you build credit! Any student loans you’ve borrowed, whether federal or private (even if you have a cosigner), are reported on your credit report when they’re taken out.
Keep your student loan balance as low as possible to make it easier to make on-time payments on it in the future. This will help you build credit history without getting into debt you can’t manage.
Stay on top of your student loan payments
Missing student loan payments can have a big negative impact on your credit score. Don’t just rely on your loan servicers to remind you when you need to pay your student loans. Set reminders each month to make your payment on time, or set up an auto-debit to minimize the worry. (Bonus: Many private lenders offer a discount on your APR if you sign up for auto-debit.) If you know you’re going to have trouble making a payment, contact your loan provider. Chances are, they’ll be willing to work with you if you reach out beforehand to let them know of the problem. After you miss a payment or two? Not so much.
NOTE: You don’t have to wait until you have to start paying off your student loans to make payments. If you can, start paying off your student loans while you’re still in school to minimize debt after graduation. Even if you’re only making interest payments, it can make a big difference in the amount you have to pay later!
Pay your bills on time
Credits cards and student loans aren’t the only things that affect your credit. Even things like cell phone bills, paying your rent, and utility payments can be reported to a credit reporting company. Always pay your bills on time to prevent a missed payment from hurting your credit.
Don’t apply for too many accounts at once
It may seem like a good thing to do when you’re trying to build credit, but credit inquiries (where companies ask a credit reporting agency for your credit report after you submit an application) can lower your credit score, especially if you have multiple inquiries in a short amount of time. People with short credit histories can especially be seen as riskier borrowers because they don’t have a long track record of paying off their debt. Keeping your number of credit accounts low shows credit reporting companies that you are a responsible borrower, and using the accounts you do have wisely will help build a positive credit history.
Dos and Don’ts of Building Credit in College
The bottom line is, managing money responsibly, making payments on time, and keeping balances low are key to building good credit. Here are some dos and don’ts to keep in mind.
- DO start building credit early
- DON’T get a credit card if you can’t pay it off in full—and on time— every month
- DO keep your student loan balance as low as possible
- DON’T miss any loan payments
- DO pay your bills on time (including rent, utilities, cell phone bills, etc.)
- DON’T try to open a lot of accounts at once
What to do next?
Private Student Loans vs. Direct Stafford Loans
How to Find a Cosigner
Compare Featured Lenders
- Competitive fixed and variable APRs starting at 3.24%1
- Multiple repayment options including: full principal and interest, interest-only, deferred, and flat payment
- Flexible payment terms ranging from 5, 8, 10, and 15 years2
- Coverage up to 100% of your school-certified cost of attendance ($1,000 minimum)3
- No origination, application and processing fees, no fees for early repayment
- Apply online in 3 minutes and get an instant credit decision
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
3As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 11/15/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
- Check your eligibility in just 2 minutes
- Flexible repayment options you can choose from
- No fees for origination, disbursement, prepayment, or late payment3
- Skip a payment once per year (once repayment period restarted)4
- Will cover up to 100% of the school's certified cost of attendance
- 9-month grace period (3 months more than most lenders)2
This information is for graduate and undergraduate students attending participating degree-granting schools. Borrowers must be U.S. citizens or U.S. permanent residents if the school is located outside of the United States. Non-U.S. citizen borrowers who reside in the U.S. are eligible with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident) and are required to provide an unexpired government-issued photo ID to verify identity. Applications are subject to a requested minimum loan amount of $1,000. Current credit and other eligibility criteria apply.
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.24% APR to 13.03% APR (excludes 0.25% Auto Pay discount). Variable rates range from 3.83% APR to 12.53% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.
1You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
2Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
3Earnest does not charge fees for origination, late payments, or prepayments. Florida Stamp Tax: For Florida
residents, Florida documentary stamp tax is required by law, calculated as $0.35 for each $100 (or portion thereof) of the principal loan amount, the amount of which is provided in the Final Disclosure. Lender will add the stamp tax to the principal loan amount. The full amount will be paid directly to the Florida Department of Revenue. Certificate of Registration No. 78-8016373916-1.
4Earnest clients may skip one payment every 12 months. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Please be aware that a skipped payment does count toward the forbearance limits. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
The information provided on this page is updated as of 11/10/2022. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information.
Up to four repayment types (including no payments while in school) and multiple repayment terms help you find the loan that fits your budget
- Variable Rates: Starting variable rates range from 4.49% APR - 13.88% APR (with autopay)*, and will never exceed 13.95% (sometimes lower in certain states as required by law)
- Fixed Rates: Fixed rates range from 4.99% APR to 14.83% APR (with autopay)*
- Easy online application!
- No origination fees, late fees, and no insufficient fund fees. Period
- Up to four repayment types (including no payments while in school) and multiple repayment terms help you find the loan that fits your budget
- 0.25% discount when you set up autopay*
*UNDERGRADUATE LOANS: Fixed rates from 4.99% to 14.75% annual percentage rate ("APR") (with autopay), variable rates from 4.49% to 13.82% APR (with autopay). GRADUATE LOANS: Fixed rates from 5.25% to 14.48% APR (with autopay), variable rates from 4.99% to 13.82% APR (with autopay). PARENT LOANS: Fixed rates from 6.50% to 14.83% APR (with autopay), variable rates from 5.74% to 13.88% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 11/14/2022.
Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, years of professional experience, income, and a variety of other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Financial Protection and Innovation under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
- Variable rates as low as 3.89% APR1; Fixed rates as low as 3.49% APR1
- Rates include 0.50% automated payment discount1, 2
- Displayed rates are for well-qualified applicants who choose the immediate repayment option at a 5-year term1
- 5, 10 or 15-year repayment terms available (rates may vary)1
- No application fees or origination fees.
- An easy student loan application with a preliminary decision in minutes.
- Cosigner Release option available.3
- Get the money you need for tuition, room and board, books and other expenses.
- Applying with a creditworthy cosigner may increase chances of approval.
Important Disclosures
PNC Solution Loans are subject to credit approval. Certain restrictions and conditions apply. PNC reserves the right to modify or discontinue the terms of these program at any time. You are encouraged to explore all scholarship, grant and federal borrowing options before applying for a private loan.
A cosigner is typically required for undergraduate students: a creditworthy cosigner is required for 17-year old students.
1 Annual Percentage Rates (APRs): APRs include a 0.50% interest rate discount for automated payments and may vary by repayment term and other factors (refer to additional details below). Rates are for the immediate repayment option, effective as of November 1, 2022 and are subject to change at any time.
Fixed APRs: APRs range 3.49%-9.24% for a 5-year, 5.29%-11.04% for a 10-year and 5.54%-11.29% for a 15-year term. Fixed rates are based on the creditworthiness of the borrower and cosigner, if any.
Variable APRs: APRs range from 3.89%-9.64% for a 5-year, 5.09%-10.84% for a 10-year and 5.34%-11.09% for a 15-year term. Variable rates are based on the Prime Rate index plus a margin depending on the creditworthiness of the borrower and cosigner, if any. The Prime index, adjusted monthly, is equal to the Prime Rate as published in the “Money Rates” section of The Wall Street Journal ‘(Eastern Edition)’ on the first business day of the immediately preceding calendar month. The Prime index is currently 6.25%. If the index increases or decreases, your rate will increase or decrease accordingly. The rate will not exceed 18%.
The lowest APR is available to well-qualified applicants. Your actual APR will be based on your credit qualifications, loan program, interest rate option, repayment term, repayment option and whether you elect the automated payment feature.
Loan Payment Examples: The monthly payment per $10,000 borrowed at a fixed-rate range of 5.29% APR to 11.04% APR for 10 years means you would make 120 payments that may range from $107.72 to $138.60. The monthly payment per $10,000 borrowed at a variable-rate range of 5.09% APR to 10.84% APR for 10 years means you would make 120 payments that may range from $106.73 to $137.46. For the variable-rate loan, monthly payment may increase or decrease if the interest rate increases or decreases. Estimated loan payment examples assume 30 days to first payment and are for the immediate repayment option. Payments vary for other rates, loan amounts and repayment terms.
2 Automated Payment Discount: During repayment, an interest rate discount of 0.50% is available for automated payments. Borrower must be making scheduled payments that include both principal and interest. Interest-only payments do not qualify for the 0.50% interest rate discount. The rate discount will be applied at the time automated payment is established. If automated payment is discontinued at any time, the discount will be removed and the rate will increase by 0.50%.
3 Cosigner Release: Requires that the borrower has made at least forty-eight (48) consecutive timely payments of principal and interest with no periods of interruption within that 48-month timeframe. To qualify, the borrower must submit a request, meet the consecutive timely payment requirements, provide proof of income and pass a credit check.
4 Repayment Options: Three repayment options are available - Immediate repayment of principal & interest, interest-only payments while in school and full deferment of principal & interest until six months after graduating or ceasing to be enrolled at least half-time in school. Interest will continue to accrue during periods of deferment. You will receive quarterly interest statements during this deferment period. Paying the interest as it accrues each quarter will save you money over the repayment term of the loan because any accrued interest that you do not pay will be added to the principal balance at the end of the deferment period.
Loan Types: PNC offers Student Loans for Undergraduates, Graduates, Health Professions, Residency and Bar Study.
PNC Solution Loan is a registered mark of the PNC Financial Services Group, Inc.
Fixed: 7.49% APR - 12.99% APR (not including 0.5% ACH discount)*
10 years
$20 minimum/month OR interest-only payments while in school
- Up to $15,000 per academic year with no cosigner required
- Fixed Rates (APR) from 7.99% to 12.49% (plus an additional 0.5% discount for ACH auto-payments)*
- No origination fee. No late payment fees. No prepayment penalties.
- Quick prequalification and rate check that won’t impact your credit
- Multiple repayment options
- Dedicated loan officer for every borrower
New student loans of $3,001 up to $15,000 per school year will be granted to residents of eligible states enrolled as undergraduates in bachelor’s degree or equivalent- granting programs at eligible schools.
Funding U offers fixed interest rate loans, without a cosigner, to students who are serious about their academic success and post-grad career. Eligibility is determined by several factors, including: school graduation rate, class hours completed, estimated graduation date, academic record, major; employment or internship experience; and, other academic and non-academic activities that demonstrate the borrower is working hard towards academic and professional goals and is on track to be able to repay debt accrued.
Eligibility is also limited by state of permanent residence. Terms and conditions vary by state. Not all loans are available in all states. Loan amounts available may vary by state.
DISBURSEMENT All Loan proceeds will be sent to the student borrower’s school around the time classes begin, on the date your school prefers. Funding U will require documentation to verify your registration and certify your loan need prior to disbursement. Your school must also certify your loan need. Your loan may be adjusted based upon the amount of need certified by your school.
REPAYMENT TERMS New Undergraduate loans for the 2021-2022 school year will have an Annual Percentage Rate (APR) of 7.49% to 12.99%. All loans have a fixed interest rate range of 7.49%* to 12.99% (before consideration of ACH discount). There is no origination fee. Interest accrues while students are in school.
In-school partial payments: Students may choose either $20 monthly as a “Fixed Payment” while enrolled in school or “Interest Only” payments. These payments will be reported to credit agencies like other student loans. All loans have a 10-year repayment term (paid monthly over 120 months starting 6 months after graduation). Both In-School payment options may not be available in all states. Student’s electing to make Interest-Only payments will receive a 0.5% interest rate discount.
PREPAYMENT PENALTIES There is no prepayment penalty on your loan.
Additional details, terms & conditions will be included in each loan offer.
*The lowest rate shown is available only to juniors & seniors with outstanding academic performance and is not typical of the rates offered to most borrowers. Your actual rate will depend on creditworthiness and other factors, such as your school year and GPA.
Variable: 0.00% APR - 23.00% APR1
5-10 years
- MUST BE a US citizen or permanent resident
- MUST BE a college junior, college senior, or grad student
- No co-signer required
- Get approved in minutes. Pre-qualify without affecting your credit score
- Income-based repayment with built-in protections, like deferred payments if you lose your job
Edly Student IBR Loans are unsecured personal student loans issued by FinWise Bank, a Utah chartered commercial bank, member FDIC. All loans are subject to eligibility criteria and review of creditworthiness and history. Terms and conditions apply.
Loans from $5,000 - $25,000 Example: $10,000 IBR Loan with a 7% gross income payment percentage for a Senior student making $65,000 annually throughout the life of the loan. Payments deferred for the first 12 months during final year of education. After which, $270 Monthly payment for 12 months. Then $379 Monthly payment for 44 months. Followed by one final payment of $137 for a total of $20,610 paid over the life of the loan.
About this example: The initial payment schedule is set upon receiving final terms and upon confirmation by your school of the loan amount. You may repay this loan at any time by paying an effective APR of 23%. The maximum amount you will pay is $22,500 (not including Late Fees and Returned Check Fees, if any). The maximum number of regularly scheduled payments you will make is 60. You will not pay more than 23% APR. No payment is required if your gross earned income is below $30,000 annually or if you lose your job and cannot find employment.