The length of your credit is one of the key components needed to increase your credit score.  Many college students ask the question, how can I build my credit history?  One way you can begin to build your credit profile is to apply for a secured credit card.  Applying for a secured credit card has both positive and negative aspects.

According to Jayakumar (2018), a secured credit card is designed for credit novices. You pay the credit card issuer a security deposit that is often equal to your credit limit, say $500. Then, you use the card and make payments as you would a regular credit card. The issuer reports your payments to the credit bureaus, which helps build your score.

On the other hand, missing payments can cost you.  The lender can take money from your deposit and report your delinquent payment, which will hurt your score.  Once you have built a credit profile, it is possible you can be approved for an unsecured credit card.  I recommend that you pay off the unsecured credit card, but leave it open.  Closing this account could cause your credit score to plunge.

 

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