Why a Good Credit Score Matters for Students
While it may seem unimportant at the time, building a good credit score early in life can make later life much easier. For instance, if you want to get your first car after Uni, or rent your own place, you’ll need good credit. The better your credit score, the more appealing and less of a risk you’ll appear to companies. Showing that you’re responsible with your money can potentially mean lower interest rates, higher borrowing limits and better repayment options.
Understanding What Affects Your Credit Score
There are a number of things you might not expect that can either positively or negatively affect your overall credit score, even if you feel like you’re being responsible. Obvious things like maxed out credit cards or missed payments may seem obvious, but there are a variety of different things that can affect your score. For instance, constantly going into an unplanned overdraft can signal to providers that you’re not responsible with your money.
Getting Started: Registering on the Electoral Roll
It might seem like it’s unrelated, however registering to be on the electoral roll actually allows financial firms and credit agencies to authentically confirm your identity. Companies will generally be more confident in lending money to you if your identity and details can be easily and efficiently verified.
Choosing and Using Student or Secured Credit Cards Wisely
Student or Secured Credit cards can seem like a gift from the heavens at first, but they can be easy to get carried away with which can leave you in trouble. Be sure to research cards before taking the plunge so you get the best offer as many offers no annual fees. Make sure you pay it off in full every month and don’t treat it like an infinite money glitch, as it can catch up with you quicker than you may realise.
Becoming an Authorised User on Someone Else’s Card
Becoming an authorised user on someone else’s card allows you to benefit from the positives, without being the direct card holder itself. You don’t even need to spend on or use the card, simply having your name as a user can help. This works well if you have a trusted parent with good credit who is willing to help.
Building Credit Through Responsible Bill and Rent Payments
Every paid off finance plan, bill paid on time or well managed overdraft can have a positive affect on your credit score. Ensuring your rent, utilities, phone bill and gym memberships are paid on the day they’re supposed to shows credit providers that you’re responsible with both your money and theirs, and can be trusted with credit.
Avoiding Common Credit Mistakes
Missing payments, even if they’re small can have serious consequences to both your finances and your credit score. Having the dates written in your calendar or setting up an automatic direct debit every month means you’re always paying on time and don’t get caught out.
Developing Good Credit Habits for the Future
Not overspending, paying all of your direct debits on time and not getting carried away with your outgoings can all help keep your credit habits healthy for later on in life. This helps you stay stress free when it comes to your finances and opens more doors later down the line. It also helps you understand the value of money more, which can be challenging to understand in early life. This means you’ll be more likely to make better financial decisions later down the line.
How TSEG Helps Students With Their Finances
Missing payments and direct debits repeatedly can cause major credit issues down the line and leave you paying fines you weren’t planning for. At TSEG, our goal is to give you peace of mind when it come to your outgoings and leave you free to focus on the important stuff like enjoying student life. By bundling all of your utility bills together, you’ve got total control over your payments and only have to worry about one single cost. Plus, for every sign up, we’ll plant a tree, which means you get to help the earth, all whilst making life that little bit easier.
