Why College Students Should Only Have 1 Credit Card

By | Feb 26, 2013

Why College Students Should Only Have 1 Credit Card
News from Fox Business:

It’s tempting for college students and grads to sign up for an in-store credit card or a rewards card to snag discounts and special offers. But experts warn these short-term gains could be counterproductive to building a positive credit history.

“Every time you apply, you’re potentially putting strain on your new and burgeoning credit history, even if you don’t use the credit, just having it available to you can make you look risky to future lenders,” says Ben Woolsey, director of marketing and consumer research for CreditCards.com. “As a student, you don’t really have that need to have more than one credit card.” 

According to a 2009 survey by Sallie Mae, 91% of undergraduates have at least one credit card, up from 76% in the same study conducted in 2004, with half of college students having four or more cards. 

Opening a new credit card generates a hard inquiry with the lender requesting an applicant’s credit score, which can ding their credit score.

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News from The Mortgage Reports:

Mortgage rates and markets change constantly. Stay 100% current by taking The Mortgage Reports by email each day. Click here to get free email alerts, or subscribe to the RSS feed in your browser.

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As the U.S. lenders continue to recover from the “loose” lending policies of last decade, credit scores play an increasingly larger role in mortgage approval decisions.

A high FICO score can mean the difference between a low mortgage rate and a high one; a preferred mortgage product and a “backup” one; and, a mortgage approval and a mortgage denial.

Like everything else is real estate, though, credit scores can be a local phenomenon. A recent study from credit reporting firm TransUnion breaks it down.

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