How To Build Your Credit As A Student

Important Debt Advice Before You Blow That Student Loan

The purpose of furthering your education is to open up opportunities for yourself. It’s to ensure your financial future is secure and bright, but sadly, many students in Canada are finding that post-secondary is doing the opposite. It's landing them in more debt and hurting their credit score. The average Canadian student owes over $25,000 once they graduate post-secondary school, so how can you build your credit as a student?

7 Tips to Avoid Student Debt:

Here are a few pointers that will ensure that your education serves its purpose and that you can graduate with your credit score intact without suffocating under enormous debt.

1. Choose the right credit card

Different credit cards have their own unique perks and reward programs, so it’s important to find something that suits your needs. PC Financial offers a great credit card that rewards you with PC Plus points, redeemable for free groceries, while CIBC offers a credit card that earns Petro-Points to save on expensive gas. You might benefit from a card that collects points towards travel, which can save you money on the holidays. Another thing you might want to avoid is cards that have annual fees.

2. Live within your means

Create a budget and stick to it, even when using your credit card. Your lifestyle should reflect your financial situation, which means that ramen noodles, public transport, and second-hand textbooks are going to be your life for a while. The more disciplined you are now, the more it will pay off in the future.

3. Look for financial opportunities at school

Are you on a scholarship program? Have you researched and applied to see if you’re eligible? Grant money that helps fund your schooling is a financial game-changer. Scholarships are available at most schools, and the application process is pretty straightforward, it’s worth the effort to see if you qualify.

4. Find a job

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.

5. Don’t apply for too many credit cards

Every time you apply for a credit card, your credit score will take a slight hit because of the inquiry. When you’re in school, stick to one card and avoid the booths and kiosks that are offering incentives for you to take their credit card. Do your research before applying for any credit product, as you could be agreeing to something that has hidden fees and payments attached to it.

6. Use your student loan strictly for the essentials

You need groceries, textbooks and a place to live, not video games, fancy phones or concert tickets. Remember, your loan is intended to cover what you need, and not what you want. As mentioned earlier, a little discipline now will ensure a brighter financial future.

7. Pay down your debts

Generally speaking, 6 months after your last semester is when it’s time to start paying back your student loan. Check out a previous post on the Dime Turner on how to pay down your debts. It’s full of helpful student debt advice.

Final Student Loan Advice For a Debt Free Future

Money is going to be tight while you’re studying and you won’t be familiar with the finer things in life, but don’t lose focus! Sacrifice now to ensure that you can enjoy more financial freedom in the future. Your actions today will impact your path tomorrow, so be smart and make disciplined decisions.

Did we miss anything? What are some other pointers you know of? Let us know in the comments!