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Your Credit GPA: 3 Must-Know Credit Concepts for Students

Isn't it about time you gained some Credit¢ents? Perhaps you've never had to worry about credit before, but now you're off on your own and it seems like you're bombarded with credit card offers everywhere you go. What should you do? You opened a checking account at the local bank, and they offered you a shiny new piece of plastic. You signed up for a free subway sandwich at student orientation, and much to your surprise a credit card with your name on it appeared in the mail two weeks later. All your friends are buying groceries with their cards, but you're still rummaging through pockets in line to find your cash stash. Does any of this sound familiar? Don't worry—you're not alone.

Whether you feel ready or not, now is the time in your life to finally take control of your personal finances and begin building a positive credit history. Don't be scared to start now, because before you know it you will need to rely on credit to finance important big-ticket purchases such as a car, home, or a graduate-level education. In fact, building and maintaining good credit is more important today than ever. Don't let anyone convince you otherwise. Commit the following 3 tips to memory, and you'll be well on your way to building an excellent credit score. Let's call it your "Credit GPA".

Get Some Credit

You simply can't build good credit if you continue to pay for everything with cash. So the best way to start your credit history off on the right path is to search and apply for a student credit card online. Not all credit cards are created equal, so remember it pays to shop around. Take a few minutes to browse through our recommendations in Creditnet's Student Credit Card Section to find the best student offers with no annual fees, zero percent interest rates, and attractive reward programs.

Pay in Full

Once you have found the perfect student card, keep life simple. One credit card is enough for a college student. Use it only to make purchases for monthly necessities such as food, gas, utilities, textbooks, or rent. Set up your account online, connect it to your checking account, keep your credit utilization under 30%, and then pay off your balance each month. Not just the minimum payment, but the entire balance! Since you are only using the card to pay for necessities already included in your monthly budget, this should not be an issue.

Always Live Within Your Means

In other words, make a sincere promise to yourself that you will spend less than your income. This may seem obvious, but the reality is many people struggle with this principle throughout life. Write down all of your expenses at the beginning of the month, determine which necessities you will pay for with your credit card, and then make sure your income can first cover those expenses before you make any other purchases. Master the art of living within your means at a young age, and you will have a financial jumpstart on most of your peers. Not only will you quickly build a solid credit score, but over time you will build a net worth that will be well worth the small sacrifices you made along the way.

on Thu, 2008-10-16 17:00