Building a good credit history as a student is one of the most important things you can do for yourself. When you want to buy a car, get a personal loan and purchase your first home, lenders will look at your credit report. Start with finding the best student credit card to build credit. I know, it sounds like it’s all in the distant future, but it takes time to build credit. And, the best time to build your credit is when you’re still a student.
For instance, when you’re ready to buy your first car, auto lenders will want to see your credit history and your credit score. Without a credit footprint, it is difficult to get the things you want. So, here are a few pointers to guide you on the best way to safely build your credit score and ensure that your education is meaningful.
Different credit cards have their own unique perks and reward programs, so it’s important to find a student credit card that works for you. When you apply for a card, the best option is to find a card that will help you spend money responsibly. That way you're not always carrying a balance, which means you’re building a positive credit history.
There are so many card options and many card issuers, so how do you decide on the best student credit card? There are cards that offer Scene points for free movies, cashback on all your purchases and much more. Choosing the right card as a student involves making sure you’re spending money responsibly and building your score. Try not to get distracted with all the other perks. There may be hidden or high fees associated with these offers.
Instead, check out the Refresh Cash Secured Card option. This option offers low-interest rates, a low annual fee, and reports your payment activities to both Canadian credit bureaus to help you build credit.
A good credit utilization ratio is less than 30 percent. This means using less than 30 percent of your credit limit. So, on a card with a $1,000 limit, when you keep your balance below $300 you're within the 30% credit utilization ratio. If you regularly go above this, it may negatively impact your score on your credit report.
Learn more about credit utilization and how it impacts your score.
Create a budget and stick to it. Make sure to make your card payments on time to avoid high-interest rates. Money may be a bit tight while you’re studying, remember to stay focused. Sacrifice now to ensure a healthy financial future. Trust us, you’ll thank yourself later.
Are you on a scholarship program? Have you researched and applied to see if you’re eligible? Grant money is a financial game-changer — it can help fund your schooling. Scholarships are available at most schools, and it’s worth the effort to see if you qualify.
Did you know that some schools offer on-campus earning opportunities? If that’s not an option, usually the surrounding off-campus areas will offer part-time work for students. Finding a part-time job while going to college will help you have disposable income so you can spend and save money while building your score.
Every time you apply for a credit card, your score will take a slight hit because of the hard credit inquiry to the two Canadian credit bureaus – this inquiry shows on your credit report and can impact your credit report. Do your research before applying for any financial products and stick to just one card. Because we are recommending that you stick to one card make sure it's the best student card to build credit. There are lots of card options available with cashback offers, but they may have hidden fees and high-interest rates attached to them, so watch out!
It’s best to look for a credit card issuer such as Refresh Financial who doesn’t do a hard check and also offers a credit building program.
You need groceries, textbooks and a place to live. Remember, your loan is intended to cover what you need, and not what you want. Use your loan responsibly and pay it back on time.
Focus on improving your score in college, so when you graduate, you have a lot of low-cost borrowing options.
Generally speaking, six months after your final college semester is when it’s time to start paying back your student loan and any other debt.
Check out this great article on how to pay down your debts. It’s filled with helpful student debt advice.
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Refresh financial offers custom credit building solutions to help you build your credit score FAST.
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