Looking after your credit score while you’re at university

A student taking care of their finances at university and building their credit score

Did you know that how you handle your finances at university can affect your credit score in later life?

In many ways, your ‘credit footprint’ begins when you’re a student – you may have a bank account with an overdraft for the first time, and you may choose to take advantage of other financial products, such as student loans and student credit cards.

If you choose to behave responsibly and look after yourself – and your money, you’ll build a great foundation for a healthy credit score in later life. You’ll be able to take advantage of better credit offers, and potentially get better deals on mortgages and car finance.

However, if you spend irresponsibly at university and run up debts, you’re paving the way for an unhealthy credit score – and it could take you several years to reverse the damage.

How can I take care of my credit score when I’m at university?

The two main things you need to watch out for are:

  • Missed payments on credit cards and loans
  • Overspending, and potentially getting yourself into debt

University can be an expensive time – you’ll have fees, rent and books to pay for, as well as food and your all-important going out fund. Here are some ideas to help you keep your credit score healthy:

  • Keep an eye on your bank balance and learn when big payments are coming in or out
  • Learn to budget and take care of your money – if you can’t afford something, save up - more credit cards aren’t the answer
  • If you applied for a student loan after 1998, it won’t affect your credit score. Read more about student loan repayments here.
  • Don’t apply for numerous credit cards and loans – if you’re refused, your credit score could be negatively affected if you’ve made too many applications in a short time frame
  • If you need more money, look into getting part-time work – or ask family members or friends if they can help out

Can I start to build up my credit score while I’m at university?

You can start to build a credit score at university by using credit responsibly.

This will show lenders that you can make payments on time, and stick to them – which will positively impact your credit score, and give lenders the confidence to lend to you in the future.

  • You could apply for a reasonably-priced mobile phone contract, and make sure you pay your bill on time every month
  • If you’re sure you’ll have enough money in your account, put household bills in your name. Just make sure your housemates pay you back for their share of the bills as soon as possible
  • Get a student credit card, spend a small amount each month, and make sure that you pay the balance back in full
  • Keep on top of all repayments and keep an eye on your credit report. If you spot something which doesn’t look right, make sure you investigate immediately

What should I do if I start to struggle with debt?

If you’re struggling with credit card bills, loan repayments or overdraft fees, the first thing to do is remember that help is available. Plus, the sooner you start working towards minimising your debt, the faster it will get sorted.

  • Tell someone that you’re struggling – whether that’s a friend, family member, a student welfare officer or a charity such as StepChange
  • Make a plan to help with prioritising your debts – and stick to it
  • Maximise your income – if it doesn’t affect your studies, this may mean taking on a second job in your spare time

Will lenders write off my credit card debt because I’m a student?

No – you’ll still have to repay the debt. Being a student is not a mitigating circumstance.

Missing payments and avoiding contact with your lender could result in your debt being handed over to a debt collection agency, and you may negatively affect your credit score. Your age and the fact you’re a student will not mean you’re treated differently.

How long does negative information stay on my credit report?

Negative information about your financial habits – such as making late payments – can appear on your credit report for up to six years, and may be visible to lenders and Credit Reference Agencies long after you’ve graduated.

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