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College students making decisions that might impact credit scores

Feb 17, 2013 Walt Wojciechowski

College students making decisions that might impact credit scores

Many college students, often prompted by their parents, opt not to take out credit cards. Should they make hasty decisions or choose to overspend, the ill effects could impact their finances for many years down the road. Those that do try to open a line of credit may find that it's not advantageous because their lack of credit could lead to unfavorable rates.

However, a younger set might be interested to know that there are different ways to boost their histories by using alternative credit sources. For instance, they can attain a Payment Reporting Builds Credit (PRBC) score by self-reporting their expenses and record of on-time payments on things like utility bills, which can be good for a student living on his or her own.

Conversely, though, if they either don't pay these expenses on time or forward them to their parents who also can't make ends meet, not only will the PRBC score be unattainable, but their normal credit score can be adversely impacted. WDTV, West Virginia's CBS affiliate, noted that many utilities providers report instances of nonpayment to credit bureaus, so paying on time now accounts for around 35 percent of an individual's credit score.

In order to make sure they can build credit even if a traditional history is nonexistant, college grads should make sure that after they move, all accounts associated with their former address are closed, USA Today suggested.