February 8, 2021
A good credit rating is essential to ensure the financial status remains stable during uncertain times. Many young professionals take needless debts during graduation or the early part of their career. These financial decisions affect them in the long run when they need financial support to achieve some important goals.
A good credit score also helps you get reasonable interest rates on credit cards. Many lenders and cell phone service providers check it in customer evaluation. Even many companies have added a credit check as part of the hiring process.
Therefore, it is essential to start early on building the credit ratings to get the maximum benefits. You will find some tips to make credit during graduation, even if you have a student loan.
- Make Payments on Time
A good credit history contains consistent repayments on time. These timely payments display responsible financial management from a person. Therefore, the lenders can trust with the money as the borrower has a habit of not missing the installments.
On the other hand, a missed payment will hurt your credit history. It starts as a mistake and soon turns into a habit. You can apply for short-term loans in Ireland to reduce the chances of missed payments and defaults.
- Get a Student Credit Card
Many banks offer student credit cards to their customers based on their eligibility. Some require fixed-deposit as security for the credit amount. You can use it for small purchases to ensure the bill is within your budget.
Many lenders provide these credit cards to their student loan borrowers. The interest rates are relatively high compared to student loans. Therefore, do not use it for unnecessary purchases.
- Become Authorised User
You can ask your parents or guardian to add you as an authorized user to their credit card. This will help build your credit ratings while they make the purchase and pay the bills. This way, you don’t have to apply or get a credit card to enjoy the benefit of increased credit ratings.
However, it may have some drawbacks as well. You cannot use the card without their permission. Your credit ratings will suffer if they fail to make payments on time.
- Find a Co-Signor for Credit Card
For personal use, you can apply for a credit card with the help of a co-signor. You can manage the purchase and payment without any interference from the parents or guardians. Although, there are quite a few options for credit cards with a co-signor facility.
You may already have a co-signor with the student loan in case you fail to repay the loan. However, the best student loans in Ireland doesn’t require a guarantor based on the loan amount and institutions.
- Do Not Apply for Too Many Credits
You don’t have to apply for every credit card available for students in the market. Lenders check the credit history before they accept the card application. These credit checks leave a trail on the history that shows desperation for funds.
Do not apply before checking the eligibility for the credit card. Wait for the service provider’s decision before applying someplace else. You must find the shortcomings in your profile and find the cause of rejection.
- Apply for Credit Builder Loan
Many lenders provide a particular category of loan to their borrowers, known as credit builder loans. Most of the time, there is no loan amount provided upfront and before the tenure is over to the borrower. Its purpose is to build credit from scratch or increase it after small damages.
You need to provide the lender with the whole loan amount until the loan tenure is completed. The loan amount is accessible only after the loan tenure is complete. If you don’t have the money upfront, you can still have a credit builder loan with monthly installments.
- Do Not Co-Sign for Friends
Do not co-sign a loan or credit card for a friend with doubtful finance management. This may sound a little selfish, but you cannot risk the credit ratings as the consequences are not worth it. You are liable to repay the loan if they default on the loan.
There will be no positives on your credit history unless you start the repayment. And if somehow you cannot afford it, the credit ratings will take a serious hit. Therefore, decline the offer and explain the situation politely.
- Use the Student Loan Responsibly
The student loan covers every expense during your stay at the university. These include college fees, rent, food, and other daily expense as well. However, you should use it to the bare minimum as they will charge interest on the amount borrowed.
A part-time job is a great option to manage the expenses during a college stay. You can sign up for paid internships to make some money while gathering valuable work experience. Or you can work as a freelancer if you know programming, graphic designing, and creative writing.
To sum up, these simple ways are enough to build a strong credit until the graduations. The benefits of strong credit history will be evident to you once you leave the university. Moreover, you only need to make student loan payments on time to have a flawless credit history.