Editorial Notebook

Start building credit history now

As many of you may start to find out, living in this world without a credit history can be a major problem. When you get your first internship, you will most likely be finding yourself renting an apartment and paying for utilities. Without a credit history, many landlords, renting agencies, and services/utilities may not be so keen to allow you to move in or provide you their service. Even if they do, you will find yourself with very high security deposits.

In order to solve this problem, it might be time to try to build some credit. The easiest way to start building credit would to get a credit card. You might have heard from your parents or others that you shouldn’t get a credit card until you have a job or a lot of money, but there is really no reason you can’t get one. Companies offer student credit cards meant for introducing students into the world of credit cards. These cards have no annual fees and sometimes actually offer decent rewards for their usage. Additionally, credit cards offer a line of protection should your wallet get stolen physically or virtually.

After my minor issues last summer with not having any credit history, I decided that I would get a credit card, and I’m finding it just as easy to manage as a debit card. Starting out, I would recommend to set your credit card to autopay for the full balance of the card; therefore, you will never pay a cent of interest. Additionally, I suggest connecting your bank accounts and credit card to a budgeting and trend analysis spending tool like www.mint.com. Mint will show your credit card transactions as a debt right next to the sum of the balances of your bank accounts if you look at your transaction history. It also offers a convenient place to track all your expenditures by category, so you might be able to find out that you’re spending way too much on online shopping, or you’re going out to restaurants too often every month. If you aren’t buying things often, I would recommend that you buy at least one item a month to keep your credit card active. If you are spending money consistently, make sure that you do not spend more than 30 percent of your credit line without paying off the balance first as spending more than that may negatively affect your credit (your starting credit line will likely be around $500).

If you keep good credit habits up, by the end of college, you will have a decent line of credit that will help you with getting better interest rates on loans—or even get a loan—come the time you need to buy a car and show your future landlords that you are trustworthy when it comes to paying your rent.