With the end of summer now in sight, many are starting to think about going back to school. This is especially true for college students. Whether it’s going shopping for their new dorm room, signing a lease on their first apartment, or something else like getting their first credit card and building credit.
Having a good credit score and using credit wisely is an important part of making the transition to adulthood. However, it can be difficult to get approved for a credit card if you don't have any credit to your name to demonstrate to credit card companies why you're creditworthy.
Learn why credit is important, how to build it, and why an Academy Bank Credit Builder card is a great option for college students.
The Importance of Good Credit For College Students
A good credit score is essential for anyone. College students who get a head start on building and maintaining a good credit score will have a leg up when it comes to meeting their future financial goals.
You may find yourself applying for a car loan, a mortgage, or another type of loan after graduation -- or even before. Even renting an apartment or applying for a job can call your credit score into question. Unfortunately, without a good credit score, your chances of getting a good interest rate on a loan, or even approval for your other plans, are much lower.
Credit scores are made up of a number of factors that combine to form a single score, which then tells a lender about a borrower's creditworthiness. These factors include your payment history and credit utilization ratio. But if you’ve never had a line of credit before, these may not apply to you just yet.
However, starting to build credit at a young age can help you achieve positive scores in some of the other categories, such as credit history length and credit mix. Overall, these can help you get started on the right track for your financial future.
How Can College Students Build Good Credit?
Opening an account and responsibly using a credit card is one of the simplest ways to begin building credit. But given the factors that credit card companies consider, college students seeking to open their first account with a traditional credit card may be turned down.
It's most likely because they don't have enough history for the credit card company to determine whether they are a worthy borrower. Lenders may believe they are too risky as an unknown quantity. This can be aggravating for students trying to build credit. How can you build credit when no one will give you the chance to do so?
A secured credit card could be the solution. Through a credit builder program, a secured credit card can assist people in building credit in a safe and supervised manner. As a result, college students can work on building a stronger credit profile with a track record of on-time payments, which will eventually help boost their scores.
A cash deposit is required to secure a credit card. If you fail to make a payment, you will still have cash on hand to back you up. This means it's less of a risk. Using a secured credit card, making even minor purchases and paying in full by the due date can all help improve your credit score. Each month, credit card companies automatically report payments to credit bureaus. Which will start increasing your credit score.
About the Academy Bank Credit Builder Credit Card
At Academy Bank, we offer a Credit Builder Secured Visa Credit Card. This could be a great option for college students or others looking to improve their credit score.
With our secured credit card, you can set your own credit limit between $300 and $3,000 based on the amount you deposit into your Credit Builder Savings account. Then, you can increase your credit limit by adding funds in increments of $50 or more to the savings account.
Features of the Academy Bank Credit Builder card include the following :
- No application fee
- No over-limit fee
- Automatic reporting to the three major credit bureaus to help you build a credit history
- Upgrade to an unsecured card with good performance.
- Added security of EMV chip technology
- Faster, more secure online transactions when you enroll in Visa® Checkout
- $39 Annual Fee
*Subject to credit approval. Improved credit score is not guaranteed. Credit score is determined by credit reporting agencies based on multiple factors, but satisfactory performance on a credit card product can improve your credit score. Default on a credit card, including missed or late payments can damage your credit score. Once added, funds cannot be withdrawn from the savings account without closing the savings account and the credit card.
How to Apply
Applying for the Academy Bank Credit Builder Secured Visa Credit Card is easy and free.
Remember that you will need to deposit an amount into a savings account equal to the credit limit you are requesting. You can request any amount between $300 and $3,000.
For example, if you are applying for a $1,000 secured credit card, you will need to deposit $1,000 into a savings account. You will then be expected to make monthly payments equal to at least the minimum payment amount shown on your monthly statement. You also must have a Credit Builder Savings Account with Academy Bank.
Here’s what else you need to apply:
- Drivers License or Government-Issued ID
- Social Security Number
- Date of Birth
- Current Home Address
- E-mail Address
Setting Our Valued Customers Up For Success
At Academy Bank, we’re on your side when it comes to your financial goals. No matter where you are in your life.
By simply using the Academy Bank Credit Builder card for everyday purchases and paying it off each month, you can improve your credit score. Making on-time payments and keeping your balances low can help you build credit successfully over time.