How I Grew My Credit Score When I Had Nonexistent Credit
We all know how much it sucks to see that number tacked on to your first credit card. A spending limit of $500? What do I do with that? Even with a limit of $1,000, if you’re a student who pays for textbooks, airplane tickets, and groceries, you might come close to maxing your card out even while trying to keep to a budget.
Obviously, a high limit is not good for everyone – if you struggle to reign in your spending, then maybe inducing that kind of temptation is not the best idea for you. But for others, this can be really useful in creating more flexibility with their credit card usage. For me, the following three tricks left me in my senior year of college with a high credit score and quite a decently long credit history for still being in college, as well as a credit limit that had been raised several times to an amount that gave me a lot of leeway to become more financially independent from my parents. Here are some tips and tricks to raise your score and/or get that limit higher (since the two often go hand-in-hand) — for the purpose of being able to make real purchases with your card that you are actually able to pay off, not to max out your card on frivolous spending.
List Your Parents’ Contributions as Your Income
When banks ask you what your income is, they’ll often divide that into taxable and non-taxable income. Taxable income is where your campus jobs and internship salaries will go, but non-taxable income is where you can factor any financial assistance your parents or family members give you. If your parents are paying your tuition and your rent, you can put that number down in that category. That bumps your overall income to a much higher number, which banks will use to extrapolate your credit limit. You can do this when you first apply for a card or you can update your annual income with your bank to reflect this.
Pay Your Own Tuition
Now, I don’t mean actually pay all your own tuition out of pocket if you don’t have to. Lord knows how much debt I’d be in if I was paying for my private university tuition on my own. What I mean is, have your parents wire tuition money to your school through you. Throughout college, my parents sent me monthly installments of thousands of dollars, which I would immediately use to pay my tuition and rent (not for any other purpose!!!). This history of large monthly payments I was making on time got my bank to raise my limit twice within a year, such that my limit was four times higher than when I first got my card. This meant when I went off the next year to my summer internships, I was able to handle all my own rent and expenses without using over 20% of my credit limit (which was great for my credit utilization rate, an important factor in determining one’s credit score).
Look for Cards with Cash Back Incentives
Many credit cards offer cash back incentives and rewards systems to incentivize continued card use. As a college student, using a credit card can be intimidating when you know the consequences of misusing it, even if you have a steady income or stream of financial support. Find a card with a rewards system that speaks to your lifestyle, and that might incentivize you to use your card more to build up that credit history — because the longer you’ve had credit accounts and have been using and paying off credit responsibly, the better your score will be. Examples include cards with cash back for bars and restaurants, or simply ones with a high flat percentage on all purchases.
Campus Jobs Worth the Time and Hassle
Working a part-time job in college can be extremely difficult. Between finding something with flexible hours to work around your classes, that’s not time intensive enough to prevent you from getting your work done, and that pays decent enough that it feels worth the effort, it feels like most available opportunities on campus are giving you the short end of the stick. I have worked a couple of different campus jobs while in college, and here are the ones that reaped the most benefits, both financially and professionally.
If you can be a TA for any class, I would absolutely recommend it. Even if it’s a class not necessarily in your major or field of study, the skills are invaluable. Being able to condense and explain complicated subjects is a skill that is useful for any internship or job, and it makes for great interview material. Other than being available to attend the class itself, the hours are usually pretty flexible, since grading can be done whenever you and the professor agree upon, and office hours are hosted upon your availability. Lastly, you’ll get to know your professor even better outside of the classroom, and you’ll reaffirm to them you know the subject material really well. This can make them a great reference for you in the future.
I worked this job at my school’s fitness center, and it was such a blessing in disguise. One of my coworkers liked to call this “a warm body position.” Basically, this is any job where your university staff needs someone to be there to make sure no one is completely ignoring the common-sense rules of how to act in that space. This job usually exists in your school residence halls, recreation facilities, and the library, to name a few places.
This position has a lot of logistical perks. Often times scheduling is completely flexible to fit your availability throughout the week. If you are looking for a job where you can work just nights or weekends, or even early in the morning, this is a great position for that. You can usually get away with getting your homework done while sitting at the desk. While I’m not advocating to ignore any responsibilities you might be tasked with in this position, usually those responsibilities take up just a fraction of your shift. The pay is not the greatest, but in those semesters where your workload is overwhelming, this kind of job really comes in handy to keep that flow of income going while you stay on top of your work.
While this is most definitely the job that I disliked the most, there were some undeniable benefits. Is it essentially calling alumni and begging them to donate money? Well, yes and no. You definitely learn some great negotiation and conversational skills, which are invaluable in any office environment, and you get to hear from people about the wide variety of career paths they have had since college. Not to mention, because pretty much everyone is aware that it’s an emotionally taxing job that has a bad reputation, the pay is usually really, really good. Being a “student fundraiser” (as my school called it) is definitely not for everyone, but there are some definite skills that you can learn from this position, and the high pay is a massive benefit.
Shivani is a college student studying decision science and statistics, who’s highly passionate about spreading useful advice about adulting to other confused twenty-somethings. She spends most of her free time-consuming pop culture and debating superhero movies with her friends.
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