Graduating to a Better Credit Profile

Congratulations on getting your degree. Now that you’ve graduated, take these important steps to ensure that you build a solid financial future.

Brush Up on Your History

Choices you make in managing your finances today can impact your credit history for years to come. First, take a moment to learn where you stand in terms of your credit rating. Your credit rating helps determine the terms for financial products like credit cards, loans and more.

You can get a free credit report from leading credit agencies like Experianopens in a new window, Equifaxopens in a new window or TransUnionopens in a new window. As you’re just starting out financially, your credit rating is likely to be lower than it will be later in your life. This means you’ll have higher interest rates than those with higher credit ratings. Don’t worry – your credit rating is not set in stone. There are ways you can build your credit.

Set Your Time Table

The best way to build a solid credit history is to pay all your bills on time. Direct debits ensure that you don’t forget payments as they’re taken out of your account automatically on scheduled dates. (Many mobile phone, broadband, and other service providers offer you a discount when you pay by direct debit as well.)

Do the Maths on Your Overdraft

If you took on an overdraft while you were in Uni, you’re now going to have to pay that back— often at steep interest charges. You may want to consider transferring this outstanding balance to a balance transfer card with a 0% balance transfer offer.

By transferring a balance to a card with a 0% offer, you’ll pay no interest for a set time period. Because these time periods and fees vary among balance transfer cards, be sure to do the maths on whether you’d be better off transferring your overdraft to a balance transfer card.

Get a Credit Builder Card

Because you’re just starting out, you’ll need to demonstrate that you can responsibly use credit products to increase your credit rating. You’ll eventually want to have a strong credit score if you ever want to buy a flat, get a loan for a car, or get a credit card.

Even if you’re new to credit cards, you can still get a credit card, like the Luma card, that will help you build your credit rating when you use it responsibly. The best way to use a credit card to build your credit is to buy something small each month, like groceries or cinema tickets, and pay that balance off in full. With time, such responsible use of your credit card will help you increase your credit rating.

Do Your Homework with the Fine Print

When you get your credit card, be sure you brush up on your credit card’s terms and conditions. Make sure you know your credit limit and your card’s interest rate when certain fees apply. If the jargon’s a little too confusing, you can always find definitions for some common credit card terminology here at Luma.