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Credit Building Tips for College Students



Many college students have a limited credit history, which commonly leads to a lower credit score. It can be difficult to qualify for new credit, such as an auto loan, without already having a good credit score. So, how do you build a credit score if you can’t get approved for new credit? Turns out, there are quite a few credit building tips for college students and no credit borrowers.

Building Credit Without Any Credit

To raise your credit score, you need to build on your credit reports. There are three major credit reporting agencies: TransUnion, Equifax, and Experian. These credit bureaus keep track of your accounts and payment history, as well as the other aspects of borrowing credit.

Your credit consists of two major things: your credit score, and your credit reports. A credit score is a three-digit number ranging from 300 to 850 that’s calculated using the things listed in your credit reports. If there’s nothing in them, it typically leads to a lower credit score. If your credit score is around 660, you’re usually considered a poor credit borrower. If you have no credit history, you’re considered a no credit or new borrower – many college students fall into this category.

Your credit score can determine a lot of your borrowing power. Lenders reference your credit score to measure your eligibility for new credit because your credit score is based on your history of borrowing. The more accounts with on-time payments you have on your credit reports, the better it reflects on your credit score.

Lenders can tell the difference between a bad credit score and a thin credit file, though.

Still, most traditional lenders are hesitant to approve borrowers with credit scores below around 660. If you’re looking for a few ways to build your credit for a car loan, we’ve got some tips on how to start.

Starting Your Credit History With No Credit

Starting your credit history while you’re a college student can be a struggle. If you’re not working, or you haven’t landed a job to begin your career just yet, it can be difficult to get approved for traditional auto loans. With a low credit score or a slim payment history as well as no high paying, steady income, traditional credit cards and car loans may be out of your reach – for now!

Here are some tactics you can use to get ready for the big leagues:

  • Credit Building Tips for College StudentsCredit builder loans – Credit builder loans are intended for new borrowers who want to save some money and build credit. The “loan” is actually just you building a savings account, but each deposit you make into the account is reported as a loan payment on your credit reports. With each on-time payment, you’re building a payment history that accounts for most of your credit score. If you make every payment on time, it raises your credit score, and you can walk away with a nice savings!
  • Authorized users – For this tactic, you need the help of someone else with a credit card, usually a parent or family member when you’re a student. As an authorized user, you’re essentially piggybacking on someone else’s credit card. You typically get your own card that’s tied to their account. Each on-time payment that the primary user makes gets reflected on your credit reports, even though you didn’t start the account and aren’t making the payments.
  • Secured credit cards – While a traditional unsecured credit card can be hard to qualify for with poor credit, secured credit cards are typically much easier to get approved for when you’re a college student. To start a secured credit card, you make a cash deposit. This deposit size usually sets the spending limit on the account, and it serves to secure that account. What this means is that if you’re unable to repay the amount you owe on the credit card, your initial deposit covers it. You have a minimum monthly payment that you must meet (if you use it), and those payments build credit history.
  • Bad credit auto loans – While working with a traditional car lender could mean having to meet high credit score requirements, there are lenders that assist borrowers with limited credit histories. They’re called subprime lenders, and they look at your income, work history, living stability, and many other factors to determine your eligibility for auto financing, instead of just using your credit score. Subprime loans are reported to the credit bureaus, so your timely payments build a good repayment history.

Not every one of these tactics is best for each college student, but chances are, at least one could work for you. There are many different ways to build credit – remember, everyone with good credit had to start somewhere!

Building Credit With a Car Loan

Car loans are commonly a good way for new borrowers to start their credit history. There are many auto lenders willing to finance brand-new borrowers. Car loans are installment loans, and they’re a great way to build a long-standing payment history. They’re usually large amounts that last for years, and can turn a no credit borrower into a good credit borrower if they’re handled well.

If you want to build credit and get a vehicle, a subprime auto loan could be the ticket. Here at Auto Credit Express, we’ve partnered with dealerships all over the country that are signed up with subprime lenders. To get matched with a dealer in your local area, fill out our free car loan request form. Let us help you get your credit history started!

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Bad Credit

3 credit habits that you need to break



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Are you using your credit card responsibly? Or do you have a few bad habits? Take a look at three common bad habits that people have with their credit cards and the best ways to stop doing them.

Habit 1: Pushing the limits

The first bad credit habit is pushing your outstanding balance close to its limit. What’s wrong with that? The first problem is that you’re giving yourself a larger debt load to contend with every month — one that accumulates interest the longer that it sits. It could be very difficult to pay down, and it could even lead to you maxing out your card.

The second problem with this habit is that it leaves you vulnerable to emergencies. You’ve taken up the majority of your available credit, so you can’t depend on it for unexpected payments. What if you need to pay for an urgent repair and there’s not enough room on your card? What can you do?

To avoid that difficult situation, you could apply for an online loan to help you cover the emergency costs and move forward. See how you can apply for an online loan in Ohio when you have no other safety nets to fall back on. It’s important that you only turn to this solution when you’re dealing with an emergency. It’s not for everyday purchases or small budgeting mistakes.

In the meantime, you should try your best to keep your credit utilization at 30% or lower — this means that your balance should be below the halfway point of your limit.

Habit 2: Paying the minimum

You pay your credit card bills on time, but you only give the minimum payment. While this habit can stop you from racking up late fees and penalties, it can still get you into hot water if you’re not careful.

Only paying the minimum for your bill will make it very difficult for you to whittle down the balance, especially when you’re continuing to charge expenses on your card. You’re only taking $20-$25 off a growing pile.

So, what can you do? If you’re paying this amount by choice, stop it — you’re only making things harder for yourself down the line. If you’re paying this amount because you don’t have any more funds, look at your budget to see whether you can cut your monthly costs to get more savings and use them to tackle your balance.

Habit 3: Using it for every single expense

You don’t need to put every single expense on your credit card. Your morning coffee? Your afternoon snack? Putting these small, everyday expenses on your card is a habit that can make your balance climb quickly.

You also don’t want to put some very important expenses on there, like mortgage payments. For one, these payments are large and will take up a significant amount of your credit. Secondly, if you need to use a credit card to make these payments on time, you need to reinvestigate your budget to see whether you can actually afford your living space.

So, what you should you do? Use a debit card, cash or checks to pay for the items above. Only put expenses on your credit card that you’re positive you can pay off in a reasonable timeframe.

Don’t let these bad habits drag you down and get you into financial trouble. Break them now, before it’s too late.

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Free credit reports have been extended; here’s why it’s important to check yours regularly



Checking your credit could save you from identity theft. (iStock)

Typically, you’d be able to check your credit report — at least for free — just once annually through each of the three major credit reporting agencies. But thanks to the coronavirus pandemic, credit reports are now more accessible than ever.

Credit reporting companies Equifax, Experian and TransUnion are all offering  free credit reports weekly through April 20, 2022.

The move means better insight into your financial health during what, for most, is an economically challenging time. According to experts, it might also be a time that’s ripe for at-risk personal information and identity theft, too — even more reason consumers should be checking their credit on the regular.


Have you checked your annual credit lately? If not, here’s what you need to know about these free nationwide credit reports and how to get them. If you’re not sure where you fit on the credit score spectrum, you may want to start using a credit monitoring service to track changes to your credit score. Credible can get you set up with a free service today.

Free credit reports for all?

The nation’s three credit bureaus initially started offering free weekly credit reporting last year, just after the pandemic began. In early March, they announced they’d extended the offer for another year, this time through April 20, 2022.

To request your free credit reports and access copies, you can go to and provide some basic information to verify your identity (things like your date of birth, Social Security Number, and address).

Once your report is ready, you should see a detailed list of all open and closed accounts in your name, your payment history, recent credit activity and more.


Protect yourself from identity theft

There are many reasons why checking your credit activity is important, but chief among them? That’d be the prevalence of data breaches in today’s world — not to mention the risk of identity theft they come with.

“In the past, it was perfectly acceptable for people to check their credit history once a year, but now with security breaches happening on a regular basis, consumers should be monitoring their credit more closely than ever,” said Clint Lotz, president and founder of, a predictive credit technology firm.

Lotz said the Equifax breach — which exposed over 147 million Americans’ personal information in mid-July 2017 — is the perfect example of why watching your credit report is important as far as identity theft protection goes. The pandemic, he said, adds an extra layer of risk to things.

“It took them [Equifax] months before they even realized they had been hacked, and considering that they hold files on hundreds of millions of Americans, it’s fair to say that many identities were stolen by the time they caught up to it,” Lotz said. “With many of us worrying about very serious issues not related to our credit, it’s a prime time for that stolen data to be put to work by bad actors in slow, methodical ways and in the hopes that nobody notices it.”

More reasons to check your credit

Checking your credit health often isn’t just good for detecting fraud alerts and to protect your identity, though. You can also monitor your report for errors — things like inaccurately reported late payments, for example — and then dispute those with the credit bureau.

If the error gets corrected, it could improve your credit score and make a jump from bad credit to a FICO score that’s more favorable. Not sure of your credit score? Head to Credible to check your score without negatively impacting it.


You can also use your credit reports and scores to monitor your financial habits — like the timeliness of your payments or how much debt you have left to pay off. Both of these factors can play a big role in your score, as well as how likely you are to get approved for loans, credit cards and other items.

“If you’re taking out a loan, getting insurance or even applying for a new job, checking your credit will allow you to see an overview of what would be seen by others looking at your credit,” said Leslie Tayne, a debt relief attorney with the Tayne Law Group. “Staying up-to-date on your credit reports and information allows you to know exactly where you need to improve.”

Want to be sure your credit is stellar before applying for a loan or insurance policy? Consider Credible’s partner product Experian Boost, which lets you use positive payment history on utilities, streaming and other bills to improve your credit score.

Set up a monitoring service, too

Though checking your credit reports manually is smart, you should also consider signing up for a credit monitoring service. These consumer financial services check your credit information and score regularly and alert you of any changes.


If you’re interested in monitoring your credit or improving your score, head to Credible and learn more about how Experian can help. You can also use Experian Boost to get credit for on-time bill payments.

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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Do Personal Loans Have Penalty APRs?



Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.

When you make your credit card payment late, you’re often subject to late fees and a penalty APR, which is a temporary spike in your interest rate.

The Blue Cash Preferred® Card from American Express, for instance, has a 13.99% to 23.99% variable APR, but the penalty APR is a variable 29.99% (see rates and fees). Penalty APRs usually last for at least six months, but card issuers often reserve the right to extend them — especially when you continue making late payments. A look at the terms for the Citi® Double Cash Card show us that the “penalty APR may apply indefinitely.”

Penalty APRs are certainly not a trap you want to fall into, but it’s not something you usually have to worry about if you have a personal loan. Personal loan lenders can, however, charge late fees upwards of $39 per late payment. Whether your loan charges late fees all depends on how good of a loan you qualify for, and that comes down to your credit score, borrowing history and ability to make your payments.

Personal loans also tend to charge lower interest rates than credit cards, too. The average personal loan interest rate for two-year loans is currently 9.46% according to Q1 2021 data from the Federal Reserve, compared to 15.91% for credit cards.

Typically, interest rates for personal loans range between roughly 2.49% and 24%, but personal loans for applicants with bad credit can come with even higher APR — so do your research before applying.

Other common personal loan fees include:

  1. Interest: The monthly charge you pay to borrow money
  2. Origination fee: A one-time upfront charge that your lender subtracts from your loan to pay for administration and processing costs
  3. Late fee: A one-time fee charged for each payment that you fail to make by the due date or within your grace period
  4. Early payoff penalty: A fee incurred when you pay off your balance faster than planned (because the lender misses out on months of expected interest payments)

As you can see, personal loans can be costly, even without a penalty APR. It’s obviously best to avoid paying extra fees whenever possible. That’s easier to do when you have a good to excellent credit score, since you’ll qualify for better loan options.

Select has a free tool to help match you with personal loan offers without damaging your credit score.

None of the loans on our best personal loan list charge origination fees or early payoff penalties, but some may charge late fees.

Our top picks for best personal loans

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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