How to establish credit in college

Learn the value of a solid credit history, and how to establish and maintain good credit as a college student.

College will likely give you your first taste of independence – living on your own, opening up your first bank account, or getting your first loan. This is a perfect time to learn how to establish a healthy credit history that will set you up for a lifetime of good financial choices and benefits.

Why does my credit matter?

Your credit history exists in one report that tells lenders about your financial history. A good credit score – as part of your overall report – can impact your interest rates on loans, car insurance rates, the deposit you put down on an apartment, and possibly your eligibility for a job.

How can I establish credit in college?

In order to obtain credit, you typically need to have credit. The good news is you do have options for getting your first credit account. Some common first credit accounts include:

  • Secured credit card: A credit line that requires you to put up an amount as collateral, and usually with a smaller credit limit.
  • Retail and gas cards: These cards establish a credit line for store purchases and have different requirements than regular credit cards.
  • Prepaid cards: With these cards, purchases are debited from the money put on them. Not all prepaid cards will help build credit, however, so be sure to check.

A Wells Fargo Cash BackSM card is one way to help you start building credit while in college. You can use it to buy books, pay bills, and cover emergencies. For every dollar you spend in net purchases (purchases minus returns/credits rounded to the nearest cent), you can earn 1% cash rewards. You can also take advantage of the low introductory rate.

How do I maintain good credit?

Once you’ve set up your first credit accounts, it’s important to make sure you keep them in good standing. Avoid common credit troubles – late payments, denied credit applications, or high balances – that directly impact your credit. Try to make minimum payments on time, pay more than the minimum, and stick to a monthly budget. Wells Fargo offers payment options that allow you to set your payments schedule, so you can pay your bills at a time that works for you.

Using credit responsibly throughout college will give you a head start in establishing good credit practices. Then, you can more easily make big purchases after graduation and into the future.

Learn about student loan repayment considerations while you’re still in school.