Credit: For College Students, It’s a Hot Topic

Did you know that your credit score and your credit report are two different things? According to Investopedia, your credit score is a statistical number that evaluates a consumer’s creditworthiness and is based on credit history. A credit report is a detailed breakdown of an individual’s credit history prepared by a credit bureau. 

You may already know this but you can keep track of your credit score for free through your bank or a website like TurboTax or Credit Karma. You also have free access to your credit report through You’re allowed a free copy of your credit report every 12 months from each credit reporting company. Those companies are Equifax, Experian, and TransUnion. There’s no need to pull all three of these reports at once. Just do one at a time every couple of months to make sure nothing funky is going on like identity theft. At the very least, you should be pulling it once a year to make sure everything’s looking good. 

Now that you know how to check your credit, where do you stand? No credit? Bad credit? Good credit? Now what?


Improving Your Credit

Okay, so your credit is bad. How did you get here? What do you need to change? What are your goals? Ask yourself those questions and take on some sort of action plan. Did you run up a credit card at Target furnishing your new apartment? Still haven’t paid off that one credit card you maxed out when you were 18? Uncle Bobby asked you to co-sign? Here’s a way to take action:


  • Create a list of your debts 
  • Have a conversation with your spouse if necessary
  • Create a budget by tracking your income and expenses
  • Use the money found during your budget to pay down your debt strategically 


How would you go about paying down your debt strategically? Check out “Two Ways to Paying Down Your Debt” and “5 Ways to Improve Your Credit” for some awesome strategies. 

Let us address the Uncle Bobby situation. You have to consider your emotions when handling your money and how your emotions can affect the decisions you make. If family is something you value, it can be difficult to tell a family member you won’t help them out financially. Remember your goals and your triggers. If you have to tell a family member or loved one no, share your goals with them. Maybe they can understand where you’re coming from and why you might not be able to help them out. It is never a good idea to co-sign for friends or family. If they miss a payment or stop paying their installment or whatever it is, it affects you and your credit, which affects your ability to borrow money or even get a job sometimes. What if an emergency happens and you need to get a credit card to help pay for your new tires? Ya’ll. Tires are expensive! Well, you won’t get accepted for that credit card if uncle Bobby messed up your credit history. 


Establishing Credit

So, you don’t have credit. Where do you start? Most establishments that give out credit cards require some sort of credit history on your end. A good place to start is to establish a secured credit card. A secured card is a credit card that requires a security deposit. The deposit also usually dictates the limit on that card. For example, putting down a $200 security deposit would place a $200 limit on your card. From there, as long as you pay off your balance before the payments are due, you’ll build positive credit.

One method recommended, is to use autopay to cover a recurring payment. For example, if you have a Netflix account, you can connect payments for it directly to your secured card and connect the secured card to a checking account. Then you can just keep the card somewhere safe where you won’t touch it and you’re good to go!

You may have heard in the past that you can also build your credit by obtaining a store credit card. This isn’t a bad option, but you have to be very disciplined about it. Owning a store credit card may encourage you to go out and make purchases more often than you would have without it. A store credit card’s purchasing power may be limited to only that store (known as a closed-loop card), so be sure you check all the terms and conditions of the card before you apply.

Wondering about points credit cards versus cash back credit cards? It’s ultimately your choice and personal preference, but our advice is to not play the points game and never pay an annual fee. Points cards can be specific and put you in a box. Most of the time, you can only use the points towards one type of reward like travel. For example, a Southwest Airlines card. You can only spend those points with that airline. What if they don’t offer the destination you want? You’re out of luck. You could miss out on better deals. Choose cash back rewards because you can actually get your reward deposited to your account and spend it on whatever you want. 

That being said, guys, make sure you check those reports annually and pay down your debts as quickly as possible. Watch out for the interest! Try not to put yourself in an Uncle Bobby situation and start working on that secured card if you haven’t yet. We believe in you! Give yourselves credit and the loan companies will too.