How to Start Building Credit After College

With the hearty congratulations that follow your college graduation comes the realization of everyday real-life financial issues. These financial issues are best navigated by having a healthy credit score. To resolve basic needs such as getting a job, renting an apartment, or home buying, you need to build a good credit history. Your landlord or any potential creditor would likely check your credit report to have a broader knowledge of your financial status and loan eligibility.

Here, we show you some essential tips to help you build a good credit profile after your college graduation.

What Is Your Credit Score?

On the journey of building a desirable credit score, the first thing to do is to ascertain what your credit score is presently. This will enable you to know from where to begin building. And if this is the first time you are aware of your credit score, it is better late than never. To know your credit score, you must review your credit report and subsequently check your credit score. You must keep in mind that the most crucial column on your credit report is the payment history which shows how often you pay off your loans.

Payoff Your Loans Regularly

If you are among the millions of Americans that graduate from college yearly with student loans, you should make an effort to organize a periodic yet effective means of repaying your student loans. Not just your student loans, all types of loans should be paid off in small installments, but at a regular interval because your credit report will show all the debt you have acquired. More importantly, it will show you have a working repayment system.

Consider Becoming An Authorized User

This is by far the easiest way to improve your credit score and have a desirable credit report without any personal liability. To be an Authorized User on another person’s credit card means to have secondary access to another person’s credit account (considering that that other person has a very good credit report which will inadvertently rub off on your credit score). This person can be your parent, your siblings, a close friend, or any other family member, but they must have excellent credit so that you can benefit. The advantage of being an authorized user on someone else’s credit account is that you will get your credit card with your name on it, and you will have access to withdraw from the card. But you do not have any responsibility for repayment (even if you have to agree to repay the person privately, it will not show as repayment on your credit score).

Get a Credit Card

Another good way to build your credit is to apply for and get your own credit account and credit card. Unlike being an authorized user, now you have complete power over your credit account and, with it, the responsibility of loan repayments. Although it is possible you do not meet the requirements to get a credit card as you are just building your credit report, you can also opt-in for a secured credit card where you have to deposit a credit limit that you cannot exceed.

Final Thoughts

Yes, it might seem challenging to build a very good credit report at the moment, considering you just graduated from college. But then, if you follow these simple steps to the letter, you are on your way to financial freedom.