Building Credit

<p>Is there a resources on campus to help me build up a good credit score? That can give me good advice?</p>

<p>No, but seriously. Does anyone know of anything I can do to build a good credit score?</p>

<p>If I’m going to go to graduate school then I may need a PLUS loan. In order to get this I’ll need a good credit score. </p>

<p>I literally have had 3 things in my name, ever. A bank account at US Bank, a cell phone bill and a cable/internet bill. Will 4+ years of no late payments on these bills and maintaining a positive checking account balance be enough to secure a Federal Direct PLUS loan for graduate school?</p>

<p>I would first start and see what your credit score is.</p>

<p>You could also get a no fee credit card, use it a little and always pay the balance off.</p>

<p>I have no idea if either of these will help in a PLUS loan or not.</p>


<p>Has anyone taken a PLUS loan? Maybe I should ask in one of the other forums.</p>

<p>XaviFM, first thing you should do is get a secured credit card. Better with a good limit - like a thousand. You will have to pay them this $1000 as a collateral, but they will return it after a year if everything is fine. I don’t know, maybe you even qualify for a regular credit card. I don’t think that on-time payment of the bills above and maintaining a checking account in good state would influence your credit history much (but on the opposite, if you are late on them it will influence the history). It might help you to get a regular credit card with your bank though.
Once you have a credit card, use it, but not a lot. Pay it off every month. Don’t exceed 20-30% of its credit limit. And you will be fine very soon!
To establish a credit history, you have to borrow and demonstrate that you are a good potential customer for the lenders :-)</p>

<p>Yes, to have a positive credit rating, you must a) have credit and b) demonstrate that you responsibly pay back what you borrowed.</p>

<p>If you can qualify for a non-secured card, that is better: find a credit card with the lowest annual fee you qualify for (preferably zero), and link it to your bank account so that the full balance is automatically paid off each month, hence no possibility of any late payments. Then use it like a debit card, <em>never</em> charging more than what you actually have in the linked bank account. </p>

<p>Also, in general, you want to keep the charges below 25% or so of the credit limit, as seatac said, except that occasionally charging a higher-priced item is one way to have your credit limit bumped up. You can also ask the issuing bank to increase your credit limit after you have had the card for a while. To maximize credit score, you want as much credit as possible, but you want to keep your balance/credit limit ratio low.</p>

<p>Look at to find the best credit card deals. Note that you don’t care about the interest rate because if you follow the advice here, you will never pay a penny of interest!</p>

<p>Once you have established credit, you can switch to a credit card with no annual fee, and that pays cash back for purchases. However, do not switch cards frequently, as credit rating is based in part on the length of time your accounts have been open (positive) and the number of new credit accounts and credit inquiries (negatives).</p>

<p>So, one credit card is enough?</p>

<p>Yes, you are better off starting with one card, because you don’t want multiple new accounts/new inquiries – this will actually initially pull your score down, while it will take a while for your payment history on the new card to pull your score up. It is OK to add one new card (or other credit account) per year.</p>

<p>I’m trying to plan for 15 months out or so.</p>

<p>I would start with one - it should be enough.</p>

<p>Is there any sort of public resource (even if it’s not UW sponsored) which could help with it?</p>

<p>American Century’s YesYouCan has many good articles on education towards financial independence. Here is one on building a good credit history.</p>

<p>[Earning</a> - Yes, You Can](<a href=“Earning - Yes, You Can”>Earning - Yes, You Can)</p>

<p> is a good resource for finding and comparing financial products. Here is a list of credit cards specifically designed for college students. Just make sure to pay that balance off each month!</p>

<p>[Student</a> Cards by Bankrate](<a href=“Credit Cards: Find the Right Offer For You & Apply Online - Bankrate”>Credit Cards: Find the Right Offer For You & Apply Online - Bankrate)</p>