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Frosh kicked off in early September and for many new college and university students, this was an exciting time. New school, new friends, and new debt are just some of the things to look forward to! Okay, so debt isn’t something anyone should look forward to, but it’s definitely on the minds of many students.

According to a new poll by CIBC, 48% of students are worried about covering their tuition, living expenses, and paying down their debts. With 36% saying they expect to graduate with more than $25,000 in debt, developing good money management skills early should be made a priority.

How Can Students Build Credit?

Building a good credit history early is always a good idea and the easiest way to do that is by signing up for a credit card. According to Cairine Wilson, vice-president of corporate citizenship at CPA Canada, it’s the small things like Netflix that can help students start building their credit history.

“It requires small recurring monthly payments and can be set it up to come out of your card account automatically” says Wilson. “This type of arrangement helps to start building a credit history, and hopefully, without too much risk.”

The key to building a solid credit history is to simply make your payments on time. Technically speaking, even if you make just the minimum payments your credit score will still be in good standing, but you’ll end up paying huge interest charges in the long run. Live within your means and always make sure that you pay your full balance every month.

Pick the Perfect Student Card

Even though you might be applying for your first credit card, that doesn’t mean you should just sign up for the first card that’s offered to you.

Applying for a credit card is similar to getting a new phone plan, do your research and pick a card that benefits you the most based on your spending habits. Some of the things you want to look out for are the interest rate, annual fee, and potential rewards.

As appealing as travel rewards, store credit, or cash back may seem; it’ll never be worth it if you’re making interest charges. I cannot stress enough how important it is to pay off your cards in full every month to avoid costly fees and penalties.

Other Ways to Build Credit History

If you have no interest in owning a credit card, don’t worry - there are other ways to build a good credit history and you might already be doing it.

“Paying a monthly cellular phone bill, having a gym membership or a student loan may yield a very short credit history, but it is all you need to get you on your way” says Wilson.

With student loans, your credit history only starts building when you actually start making payments. That comes after you graduate so don’t assume that you’re building your credit history just because you have a student loan.

If you’re not sure how your credit history is looking, you can always request a credit report from one of the major credit reporting bureaus. Both Equifax and TransUnion Canada offer this service free once a year.

Study Up On Your Credit Skills

If you want to improve your financial literacy there are a few different resources available to you. The Canadian Financial Literacy Database offers various interactive tools and information made by financial education providers. The Chartered Professional Accountants of Canada also offers different resources that can help you learn more about your money. Take the time to educate yourself early and you could be in good shape for life.

Barry Choi

Barry Choi is a personal finance and budget travel expert at He has been quoted by media in Canada and the United States including The Financial Post, The Toronto Star, Business Insider, The Globe and Mail, and has appeared on HuffPost Live.

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