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Building credit can be a daunting task. Without a credit history, it could be hard to get a loan, be approved for a credit card, or be allowed to rent an apartment. During college, many people don’t think about establishing credit. It is best to start establishing credit before you need to enter the “real world” and fend for yourself.

Secured Credit Card

You will most likely need to start with a secured credit card to help you build your credit from scratch. This credit card is backed up by an upfront cash deposit which acts as your credit limit. The main purpose of this card is to build enough credit to be able to qualify for a different card with better benefits and no cash deposit. You would use this card like any other. You would make purchases, make the payments, and incur interest if you did not pay your full balance. Once you close your account, you will receive your deposit back.

Apply for a Credit-Builder Loan

The sole purpose of a credit-builder loan is to build your credit. Though you do not need good credit to be approved for these loans, you will be required to have enough income to make the payments. Your payments will be reported to the credit bureaus and those on-time payments can have a huge impact on your score.

Get a Co-Signer

Getting someone with better credit to be a co-signer could improve your odds of qualifying for a credit or loans. It is also possible to receive a lower interest rate. Being a co-signer does come with risks. One of the highest risks is that your credit is on the line and you are relying on someone else.

Be Authorized on Someone Else’s Credit Card

If your parents are willing to add you as an authorized user on their credit card, you will then have access to the credit card. You can build your credit history but technically don’t have to pay for any of your charges. Be sure that the card issuer reports your activity to the credit bureaus or your efforts to build credit may be wasted.