I have a year left to go in college. Everyone recommends getting a credit card and using it lightly to build up my credit score.
My question is, why worry about building credit now anyway? I won't be buying a car or a house for many years. Federal loans are available for grad school, and credit doesn't matter for those. I would rather pay for everyday purchases with cash or a debit card than a credit card. What on earth would a recent graduate need credit for?
Just curious, since everyone makes such a big deal out of this.
Credit cards come in handy for things like hotel reservations, car rentals, and airline tickets. Yes, you can use your debit card for these things but hotels and car rentals are notorious for putting large "holds" to make sure there's enough to cover extra charges. No problem with a credit card, but it can sure cause NSF fees with a debit card.
Your credit report/score also dictates what you pay for car insurance. Likewise, employers might eliminate you from job consideration if you have a low credit score. Oh and some landlords run credit checks.
You don't build good credit overnight. So you might not need it right now. But in a few years, you will. Getting that credit card, using it occassinally, and paying it in full every month would give you a pretty good payment history.
Because good credit allows you to get important loans for things that you can't normally save to pay cash for - home, auto etc.
But, it also effects your Insurnace rates. Bad credit = higher rates.
When i was very young I thought credit was optional. Now I learned good credit is a nessessity unless you have a lot of money burried in your back yard.
Bad credit = high interest rates if you should find someone to give you credit. So bad credit costs you a lot of your hard earned money.
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http://www.bestcreditrates.net
you do not need credit for anything. Pay cash for everything that you buy. Keep upgrading in cars until you are going to be able to get a brand new one if that is what you want. When you get a house find a mortgage company that does manual underwriting. They look at your debt to income ratio instead of your credit number. Building Corporate & Business Credit - No Personal Guarantee - Business ::
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I personally dont recommed credit cards to anyone! but you need to always build up your credit!! At 19 i had my son go to a jewelry store and purchase something for him! Something he would wear and like, of course it was a simple chain an every month he pays a small amount on it thats is required! So one day when he's older he wont hear " We sry you have no credit we cant help you". that could be buying a car, house, or whatever but its important that u build up your credit and keep it clean<< another words dont miss a payment.!! always make sure its on time! it goes on your credit report, So when he wanted another cell phone he didnt have to pay a deposit because he already established it! You need credit for alot of things,, dont go big like a credit card! Go easy so u dont have alot of pay back! But yes hon its very important,, if u dont pay back it will go against you for 10+ years! If u dont think u need it now then dont do it! But it would be smart to do something to build it now!!!Sometimes places to live require credit reports!
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take care and great looking out!~!
Bonnie J
It's like insurance...Better to have it and not need it than need it and not have it. You will come to a point in your life where you will need established credit for a car loan or home loan. If you have a good established rating your interest rate will be less.
Its better to have some than not at all. You may think you won't need to buy a car or house soon but you can't always predict the future. If you can prepare yourself and your life ahead of you then why wouldn't you? I'm still in college and I have had several things in my name that have built my credit and I have excellent credit because of that.
it will matter when you're forty. Build some credit, just make sure you pay everything off the same month.
@ poster
Utilities and cell phones do NOT submit positive activity to your credit report...only negative stuff.
Read 'The Total Money Makeover' by Dave Ramsey and you will learn what the myth of 'Building Credit' is all about. Normal in this country is being in debt, making payments, and living paycheck to paycheck. If you want to win, you have to be 'weird'. Learn to live on less than you make and pay cash for stuff. Payments rob us of our biggest wealth building tool, our income. The credit industry had done a wonderful job of marketing the notion that 'debt is a tool' that will help us get the the things we need. Well, we can get those same things with something else. It's called cash!
If you make enough money credit doesn't matter!
when you have good credit you can get anything, literally.
Plus it takes time to build good credit, you cant do it over night. All too often things happen that we never planned on, Its best to get your credit set now before you need it
--you know something called planning for the future?
Good Luck!
 How can I build up credit.?
 Automotive paint detailing.?
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Why build credit?