As college students, we find ourselves caught up in school plans, work, searching for internships and other career related tasks. All these responsibilities are essential when trying to establish yourself as a  businessman/woman. Your credit score is your pass to many things in life such as whether you can buy a house, the interest rate on mortgage payments, starting a business, car payments, your ability to take out loans, the interest on those loans, insurance coverage and even whether you get a new job. Building your credit score at an early age is a great start to creating a stable financial foundation so you can have a stable credit history for future endeavors. Maintaining a good credit score is not easy but possible, if you are smart about spending. Here are some tips in order of importance to your credit score rating:
1. Pay your bills on time (35%) – The decision to shuffle your bill under a bunch of other papers may be tempting but not beneficial. Whether you have a two-cycle average daily balance (which computes the average daily balance for the current and previous billing cycle. What does this mean for you? You pay more), or an average daily balance (which is the average amount that exists in an account over a period of time).

2. Closing credit cards (30%) – Your debt-to-credit ratio is important because the lower the amount of credit card debt you have, the better it is for your credit score. This can be tricky due to the terms of the credit score system. An example is: you have two cards (Card A and Card B) you charge $1,000 on both with a credit limit of $5,000. Your current ratio is 20% (10% each total $1,000) the recommended debt to credit card ratio 25%. However, you decide to take advantage of a deal offering a 0% balance transfer fee of $1,000 from Card A to Card B. You decide to close the account with no balance thinking you are helping yourself, but this changes your score. Now you have Card B with $2,000 and a balance of $5,000 resulting in a 40% ratio. Although you haven’t spent any money, you now seem risky to credit review bureaus due to the 20% increase in your debt-to-credit ratio. It is therefore recommended that you try to keep your debit to credit ratio below 25%.

3. Your credit history is important (15%) – This goes hand in hand with the above point, older accounts boost your credit rating. If you must cancel a credit card, cancel the newest one and wait about 30 days. If by the end of the month your credit score has not been negatively affected, do the same for any other cards. Closed accounts will still be included in your credit score, but after 10 years, they will be dropped from your credit report.

4. Select the right credit card (10%) – Do your research and avoid cards with unnecessary fees (annual fee, interest rate, late fee, over-the-limit fee). Find a rewards program that will be useful to you. Do not choose a travel rewards card if you barely book flights. Determine the grace period; if you are able to pay your bill off in time, you will not have to pay interest on purchases you make until next month.

5. Have a mix of loans and credit (10%) – Often retail stores offer a credit card for their store to promote “extreme savings”. By owning too many cards, you give an impression of not being trustworthy. Instead of applying for more cards, apply for installment loans as lenders like to see a good mix of installment loans along with your credit cards. These loans (like for car and house payments) show how reliable a person can be, especially if payments have been made on time for an extended period.

Research extensively the various conditions for any credit card; in the end, these are for profit companies. As a college student with a good credit score at an early age, you will have a head start.