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Smart Cents - Get Your Credit in Shape
“I don’t really carry cash- I just always use my credit card.” You know who you are girls. A couple swipes of the gold card here, your student loan there, text books and that outfit you just HAD to buy on a whim; before you know it, it’s easy to end up in jumbled mess of credit questions and mistakes.
Our Smart Cents columnist, Megan, will walk us through five easy ways to keep our credit in tip-top shape. And by easy, we mean brilliantly simple. Relax, you can put those scissors away now 
While most people are aware that your credit score can be the decisive factor in everything from credit cards to home loans, very few college students are aware of five easy steps they can take to build and improve their credit score now.1) Get your free credit report. Every individual is entitled to a free look at their credit report once a year (www.annualcreditreport.com). This shows all the loans, bills, and credit cards that are currently showing up on your credit report. Not only will it make you aware of items affecting your credit score, checking your credit report can help you ensure that no one has stolen your identity. College students are one of the largest targets of identity theft, because very few students need their credit score until after graduation, giving would-be thieves up to four years of free spending on your name.
2) Limit your credit cards. Credit card offers often flood the mailbox, and while one or two credit cards can help build credit, having multiple credit cards can often harm your credit score. Try to open only one or two credit cards and keep the balances at 50% or less than the available credit line. Credit agencies use the balance-to-credit-line ratio when determining your score and the higher the ratio, the lower your score. Also try to avoid opening multiple store credit cards. While these are not traditional credit cards, they are treated as such on your credit report and opening one will reduce your credit score by up to 20 points.
3) Do not apply for credit frequently. Every application results in a credit inquiry and inquiries also appear on your credit report. In general, one credit inquiry will reduce your credit score by 5 points, however a lot of inquires can do even more damage. However, your request for your free personal credit report will not count against you.
4) Pay your bills on time. Any payments that are 30 days late will show up on your credit report and can remain there for up to 7 years. It does not matter if the late payment is large or small, the negative impact to your credit report will be the same. If you are worried about making payments on time, set up automatic bill payments to ease your mind.
5) Title. There are several non-traditional ways to improve your credit, such as piggy-backing. If your parents are paying certain loans and bills for you, i.e. car loans and cell-phone bills, have them put these bills in your name, or co-sign with them. Then you can build your credit as they make the payments. Also offer to put apartment bills in your name, such as the electricity and cable, and have your roommates pay you their portion.
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