As new college students across the nation head back to school, they face a new reality of financial responsibility. Living away from home comes with many temptations, but indulging too much can do serious harm to a student’s credit history. 

“It’s easy for incoming freshmen to become overwhelmed with the options available to them when they first live away from home,” said Kim Schlader, VP/Lead Retail Lender. “This is a good time to start thinking about credit and learning how to use it responsibly, which will prove very beneficial for them in the future.” 

3 steps to positive credit

All high school graduates should – by this time – have a checking and savings account. Maintaining positive balances in those accounts is the first thing students can do to start building credibility. Doing so can help them develop a positive relationship with a bank, so the bank will see less risk in lending money to them in the future. There is much more that new college students can do to establish a positive credit history:

1.       Apply for a credit card. There are many options available to choose from when it comes to credit cards. New students should look for a card without an annual fee and a low interest rate. Many cards also offer features like cash back rewards. Students should research these options to choose a credit card that will be the right fit.

2.       Use the credit card – RESPONSIBLY. Credit cannot be established if credit is not used. Making a few purchases each month can help create a history of credit use. It is important, however, that students not charge more than they can afford to pay off each month.

3.       Pay balances on time. Once a student is approved for a credit card and starts using that card, it’s time for the most important step. Paying off balances on time will create a positive credit history, showing that the student is able to manage credit wisely.

Want to learn more?

Contact First Security at 1.800.272.0159 to connect with a banker that can help answer questions and offer options on how to build credit.