College Finance: Managing Your Credit Score

Optimizing your credit score while you are a student is a great way to position your financial life after graduation.

The problem with a credit score is it takes years to build and only days to destroy. A person must pay the bills on time month after month to get a score to a decent level. According to Money Magazine (, it usually takes around three years for a credit card to have a positive effect on your credit rating. There was a time when college students were advised to steer clear of credit card offers, but now many financial experts are recommending students use credit wisely to position themselves for the future. Just having a credit card won't get your credit score where you want it to be after graduation. Here are some tips on getting your score moving.

On The Record

According to credit information website,, credit scores range between 330 and 830. A good score is above 700. So how do you know your score? Get a credit report. Three companies -- Equifax, Experian and Trans Union -- provide credit reports. By law every consumer is eligible to receive one free copy of their credit report per year.

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Steps to Improve

Once you know where you stand in the eyes of a lender, you can take steps to move your score upwards. But first, you need to make sure there aren't any mistakes on your report. According to interest rate know-it-all, about one in four people have a mistake on their credit report. A mistake can seriously affect your score, so you will want to contact one of the three bureaus and get mistakes corrected.

To increase your score the good old fashioned way, follow these tips from

  • Never spend more than 30 percent of your maximum credit limit.
  • Pay all your bills on time -- this includes credit cards, utilities, everything.
  • Don't apply for more lines of credit than you need. Lots of inquiries to your record can damage your score.
  • Charge small amounts on each of your cards. Using your credit and paying the bills on time is what builds your history.

The way to build a good credit score is to not spend above your means and to lightly, regularly purchase on credit. Remember, taking out a credit card and throwing it in the sock drawer will not increase your score.

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