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How College Students Can Start Establishing Credit

College is a time for many firsts: living away from home, meeting different people and learning new things. It’s also a time to start setting yourself up for financial success after graduation. Begin by establishing credit.

Why it’s Important
Having good credit helps you rent an apartment, get a loan or mortgage and even get a cell phone plan. Your credit score reflects your credit history. The most common is the Fair Isaac Corp. FICO score, which runs on a scale from 300 to 850, with 850 signifying the best credit.

Student Credit Cards
As paradoxical as it might sound, it takes credit to build credit. Issuers such as Harris County Federal Credit Union understand that students might not have the history it takes to get a credit card. If you earn income, you can apply for a student credit card on your own. If not, you might be able to get one as long as you have a co-signer, such as a parent, to guarantee that the bills will be paid.

With a slew of cards on the market, it’s hard to know which one to choose. An ideal first card has these features:

No annual fee. Some rewards cards charge yearly fees, but there are plenty with no annual fee. As a student, you’re probably strapped for cash, so there’s no need to pay extra charges if you don’t have to.

Getting paid to spend sounds too good to be true, but many student credit cards offer rewards for things students spend a lot on: restaurants, textbooks and entertainment.

Low rate. If you think you’ll carry a balance on your card, look for one that charges a low interest rate. If you know you’ll pay off the balance each month, you won’t have to pay interest, so it’s okay to get a card with a higher rate.

Use it responsibly. Once you have a card, you’re not off the hook yet. You have to use it correctly to build good credit.

Make prompt payments. Payment history is the largest contributing factor in your credit score. So pay at least the minimum by the due date.

Don’t max it out. How much of your available credit you actually use also affects your score. To keep your debt-to-credit ratio low, only use about 30% of your card’s limit. For example, if the limit is $1,000, only charge about $300 at a time.

Keep it open. Even if you aren’t using it, don’t close your account. This helps improve the length of your credit history, which is also considered in calculating your score.

Avoid multiple applications. Applying for a new card triggers a credit inquiry and can lower the average age of your credit accounts. A lot of applications over a short period of time can damage your score.

Diversify your credit. The types of credit you use contribute to 10% of your score. Credit cards, auto and student loans can help diversify your record.

Be patient. Building credit takes time, but if you start as a student and compile a good track record, you’ll be well equipped by the time you graduate.

Teddy Nykiel, NerdWallet

How to Stay Safe When Shopping for Holiday Gifts Online

– Want to avoid long lines and large crowds this holiday season? Shopping online lets you zip through your list with just a few clicks.

Before whipping out your plastic, however, you’ll want to make sure you’re shopping on a secure site. Use these tips to keep your data safe.

1. Look for the padlock symbol

Don’t check out at a website unless you see a padlock symbol on the browser bar of whatever device you’re using. This symbol means that the page has extra security to prevent others from viewing your sensitive information.

Another way to tell a website is secure is that it starts with “https” instead of just “HTTP.” The “s” means the site is secure.

2. Be cautious around public Wi-Fi

If you need to check your online banking account while you’re away from home, avoid public Wi-Fi networks. Many retailers provide free Wi-Fi as a convenience to customers, but you can’t be sure who’s able to see the data you send on the network — including private information.

Instead, consider using a virtual private network, or VPN, a service that lets you encrypt the information you send over the internet. That way, others won’t be able to access your data even if they can access the network. You can also send data over your personal cellular provider’s network, which bypasses Wi-Fi.

3. Use a credit card instead of a debit card

Credit cards offer better consumer protections than debit cards do. If someone steals your credit card information and uses it to make unauthorized purchases, you’ll be liable for $50 at most, depending on how quickly you report the loss.  If your debit card information is stolen, you could lose all the money linked to your checking account.

If you’re unhappy with an item you bought on a credit card — say it was damaged when you received it or it was never delivered — you don’t have to pay until the dispute is resolved. But if you’re unhappy with a debit card purchase, you’ll need to file a dispute with the retailer and possibly your bank to try to recover the money after the fact. That’s because debit card purchases automatically withdraw funds from your bank account.

4. Change passwords regularly

Even if you take steps to shopping securely, a hacker could steal your username, password or other sensitive information from a retailer’s database. Protect yourself by changing the passwords of your online accounts every three months or so. That way, if hackers do breach a retailer’s software, there’s a good chance they’ll have access only to an old password.

5. Update anti-virus software

If you shop from a home computer, keep your security software updated. Anti-virus software companies frequently release security updates to address newly discovered security loopholes.

Follow these tips and you can take advantage of the convenience of online shopping while also protecting yourself from online fraud.

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