We know you have more than likely received mail from a credit lender saying, “you have been prequalified for a $1,000 credit line.” Did you know that credit card companies often target college students because lenders realize that college students have expenses and limited hours to work a job being a full-time student? If a student runs up the balance on a credit card, that means the credit lender will collect more interest. It is important to understand the responsibility a credit card warrants to create smart credit spending habits.

Building your credit, however, is an important step in your financial future. You often have to have a credit history to rent an apartment, apply for a loan and even obtain a cell phone in your own name. Anytime you use credit, you’re adding a chapter to your credit history. All your credit transactions are recorded in a credit report, which is available to potential lenders who want to know how you’ve used credit in the past. You can check your credit report for free at www.annualcreditreport.com.

Your credit history contains all uses of credit, such as student loans and those everyday credit purchases. You’re assigned a credit score based on the details of your credit report. Your credit score is a snapshot of your creditworthiness, which lenders use to decide if you present a credit risk. The higher your credit score, the more creditworthy you are, and the more likely you are to receive credit. Establishing those wants versus needs is important when using a credit card because it is easy to splurge when you know you have the money. College is a good time to start building your credit history and you can do that by making payments on time and ideally in full each month.