3 ways to get approved for a car or apartment loan as a college student

About 45 million Americans have little or no credit history loan tree. That makes them less likely to get approved for a car or apartment loan.

Often, these big strides in life require a credit check. With little or no credit, you may have to pay a higher deposit, find a guarantor, or look for an apartment that doesn’t have a credit check. And buying a car can mean a higher upfront payment, getting a co-signer, or paying in cash. All of those options may be inconvenient or may not be feasible for a recent college graduate.

If you’re not in a hurry to make a big purchase or to live alone, it’s a good idea to take the time to build your credit today. Here are three ways to get started:

Think about being a authorized user as the training wheel of credit. It will allow you to build your credit with the help of others and introduce you to the basics of credit. When a parent, guardian, or someone you trust — and someone who trusts you — adds you as an authorized user, you’ll receive a credit card with your name in the mail.

Often, parents may choose to hide the card for several years before letting their child use it. But once it’s in your hands, it can be used as a credit-building tool or for emergencies. This option is good because when you’re ready to apply for your own credit card, you’ll have a credit history to increase your chances of getting approved.

As a senior in high school, I was added as an authorized user to one of my parents’ credit cards. When it came time to apply for my first credit card as a sophomore in college, I had a credit line set up and was immediately approved.

Based on my experience, my number one advice is to become an authorized user as soon as possible if someone is willing to help.

One student credit card is the easiest card for a college student to get approved. We recommend Student Rewards Journey from Capital One Card. This card is a valuable tool for earning rewards. With this card, you can monitor your credit profile with unlimited access to your credit score and automatically be considered for a higher credit limit after just six months.

Next is a secured credit card if you have less than perfect credit. This card is backed by a cash deposit that will act as collateral on the account. That means the issuer has extra security if the cardholder is unable to make the payment.

Finally, open a cashback credit card will allow you to get back a percentage of the money you spend, similar to a discount or coupon.

Using credit cards responsibly is an important part of maintaining good credit. After you receive your first card, your payment history will account for 35% of your FICO score. Based on loan treeIf you pay by credit card more than 30 days late, your credit score could drop by up to 180 points and could be on your credit report for up to seven years, which could make it difficult for you to get approved. favorable for a more payment. home or car loan.

As a result of three years of on-time payments and keeping my credit card balances low, I was able to build my credit. It’s easy to get approved for car and apartment loans without paying a deposit or needing a co-signer.

I know how overwhelming it can be to try to navigate build your credit. For some people, getting a credit card or being an authorized user on a parent’s card is a no-brainer. Fortunately, there are other options:

Consider signing up for one credit construction loan. These are low-risk loans that are easily qualified without a credit history. Furthermore, all payments made with this loan are reported to Equifax, Experian, and TransUnion.

If you are a frequent online shopper, use Buy now, pay later Point-of-sale installment loans can be an option for building credit. When you make a purchase, you can pay in four or more installments with no interest. While these services have their benefits, the disadvantage is that you run the risk of being charged late fees if you miss a payment. I have experience using BNPL but do not want to make online purchases unless I can pay in full.

Finally, services like increase experience can help boost your FICO Credit Score by tracking your monthly phone and utility payments. To use this service, you need to present three months of payment within the last six months. Using this service will do more than boost your FICO score right now – it will also build your credit in the long run. And after securing your first apartment, you can also use your rent payments to boost your score.

Understand that credit is used for many things in adult life, so there is a credit score within good range will improve your approval rate.

With responsible credit practices, you’ll get your next home or car before you know it.

Related: What you should know before applying for a college credit card