How to Not Ruin Your Credit Score As a College Freshman

VD September 09 2021

As a college freshman, financial mistakes are something we all have to face. Most students find it very difficult to afford the tuition costs with living expenses, making the situation very challenging for them.  Freshman financial mistakes are common but avoidable.

In this article, we will try to explain some common financial mistakes that will help you understand the college freshman's financial challenges and give you solutions to save your credit score. So without any further delay, let’s dive in.

How to Avoid Freshman’s Financial Mistakes

The first year of college is significant; suddenly, you have to take a lot of responsibility. In addition to that, most college freshman financial mistakes are due to the debt accrued on them, and it sticks to them for years. 

It is not surprising if you are making financial mistakes, but if you plan to play safe, you can save thousands of dollars, and your credit score will not be ruined. Keeping all these things in mind. The below-mentioned list of solutions can prove to be very helpful if you set your routine according to that.

Keep a Credit Card for the Emergency

Most first-year college students don’t know how credit cards can spoil their budget in the long run. Getting a credit card for the first time will make your purchase what you don’t even need. In the beginning, you will feel the credit limit provided by the bank is free money, and you can enjoy anything with it. You might consider getting a new mobile, going on shopping, going to social gatherings, and more. When you are using a credit card to afford these things, that means you cannot afford them. 

You will feel like everything is under control for a month or more, but suddenly you will see how high-interest rates on credit cards are destroying your budget. Therefore, it is always recommended to keep our credit cards for only emergencies. Never buy anything that is not in your range.

The biggest mistake we all make in our college life is that we assume it doesn’t matter if we spend a bit extra. We have our whole life to pay back the debts, but once you start sinking under the burden of debt, there is no way back.

You need to be clever and understand that a credit card is nothing more than a trap and always use your credit card like a debit card.

Use your student loans only when you need them

It is a fact that student interest is low. However, this doesn’t mean you should use all these loans in early student life. You have to look into it carefully and plan everything keeping in mind that nearly every student takes 20 years to repay the student loan provided by the bank. This will take a massive chunk of your earnings every month, and you wouldn’t be able to afford your own house, car, and other essential things if you are not earning more than $5,000 a month in your thirties with a white-collar job.

After you finish your studies, these loans will be the only factor determining how you will be able to spend your life in your early thirties. It is recommended to use a student loan calculator to plan everything according to your need. This way, you will avoid another common freshman financial mistake.

Doing everything according to your needs might make you make short-term compromises such as living in a shared apartment, eating simple food, traveling by public transport, but trust me, it will help you a lot in the future. While people who don’t care about the loans right now will face the future, and they will see how relaxed you are in your professional life. Keep your goal to find a plan that is comfortable and does not put you in debt too.

Create your monthly or weekly budget and stick to it

Research shows that almost 90% of first-year college students overspend and invest in things that will not give them any financial benefit in the future. Examples of such things can be: expensive mobile phones, renting luxury apartments and cars, buying expensive food, trips, and gaming devices. There are multiple other things as well, but these are the major ones, and that’s a major freshman financial mistake.

Teenagers are inexperienced, and they have no idea how to handle the money. Even if they have not considered any loan option, they end up with empty pockets before the end of the month. Therefore, they need to develop the habit of budgeting and make a list of essential things they need to pay for, such as tuition fees, food, and rent.

The biggest college freshmen financial mistake is that they don’t cut expenses at each step. Suppose they start to cut expenses at each step, such as getting a low-budget shared apartment instead of eating in fancy restaurants every day, cooking at home, and similar. After these expenses, if you are left with any money, you can utilize it for saving or anything like mobile phones, expensive laptops, cars, and more.

Start investing

If you have any leftover money, you can use it in multiple ways. You can use this money to make good money. In the modern world, we would recommend you to learn. Start by investing money in buying a course in investing that will help you understand this skill. You can also invest in learning, such as selling things on Amazon or become a virtual assistant. 


Putting all things together, we would like to recommend that to all students who never waste their teenage years in showcasing something you don’t own. Instead, make yourself the person that can easily afford what you fancy. We have mentioned some tips and tricks that will help you avoid freshman financial mistakes and make your financial future right from the start.