How to Build Credit for Students

Building credit as a student is important, but luckily it is not as intimidating as it sounds. Just follow our step by step infographic guide.

Infographics: Build Credit for Students © CreditDonkey

Saddled with $1 trillion in student loans and the highest unemployment rate since the government began keeping track in 1948, today's college students may be the unluckiest since the 1930s, making it all the more critical that they seek smart ways to build credit, says Charles Tran, founder of CreditDonkey.

"Just 54 percent of adults aged 18 to 24 have jobs, according to a new Pew Research Center study," said Tran. "The Consumer Financial Protection Bureau reports that student loan debt has reached $1 trillion, and is continuing to grow as recent grads struggle to keep up with payments. This twin blast of bad luck is making it harder for young people to establish the reputations they'll need to obtain student credit cards, and to qualify for mortgages and car loans."

In response, we put together a new infographic offering students step-by-step instructions on establishing good credit. Among the credit-building tips:

• Becoming an authorized user on your parents' credit card is becoming an increasingly popular option, especially in the wake of the CARD Act, which requires people under 21 to have a co-signer or proof of their own income to get credit cards.

  Be sure that your parents have a good credit. If they don't, or they pay the bills late, it could negatively affect your credit.

• If you don't qualify for an unsecured student credit card, consider a secured credit card.

  A secured credit card usually requires you to deposit an amount equal to the available credit you'll receive. A bank at which you already have an account is a good place to get a secured card. It isn't an ideal solution, but it's better than no card at all. Once you've established a credit history, contact the bank about getting an unsecured card.

• Read our "Student Guide to Credit Cards to learn how to avoid crippling debt and navigate the world of student credit cards.

"What many young adults don't know is that they may have a credit history already, especially if they've taken out student loans or interacted with some other financial institution," added Tran. One of the first things people should do is to review their credit report. Visit www.annualcreditreport.com to get a free credit report from each of the three credit reporting agencies."

(Research by Kelly; Graphic Design by Marco)