College students will be inundated by credit card offers the minute they take out their student loans, but most of these offers come with an abundance of fine print that could leave your student paying heinous interest rates for the most minor transgressions (like a payment that’s late by just a few days, for example). These options provide more ways to ruin credit than build it. So if you want to help your student start off on the right foot where his credit score is concerned so that he can buy a car or get a lease on his own after graduation, here are a few methods you can use to help your college student build a credit history:

1. Open a bank account. Okay, so the money he’s got in the bank won’t actually boost his credit rating, but it’s something that most lenders look at, so before he can even start to build credit he’ll need some cash on hand in order to be eligible. No lender wants to extend a line of credit to a person who doesn’t even have a bank account, so this is an essential first step in the overall process.
2. Co-sign on a car. Since he won’t start paying his student loans until after school, and paying off loans is one of the best ways to build credit, perhaps you’ll want to help him out by fixing him up with a car before he heads off to college. Many parents want their kids to have reliable transportation when they’re away from home anyway, but by co-signing you can help him to get a better loan and lower interest rates on his purchase while still having the asset in his name. Just make sure his name appears first so that his credit will get the bump from the payment history.
3. Share a credit card. Although sharing a credit card with your teen can be a frightening proposition, it’s still a great way to build credit. And if you don’t want him going wild with spending, simply sign up for a gas or grocery card that comes with a manageably low limit. You may be helping him to pay for essentials like fuel and food anyway, so this can kill two birds with one stone. Again, you’ll want to make sure that he’s getting at least equal credit for payments on the card, though.
4. Open a secure credit card. If you’re not too keen on risking your stellar credit rating by sharing a card with your inexperienced college student, then opening a secure credit card is a fantastic alternative. In most cases these cards are provided by the institution you bank with, and he’ll simply have to provide a deposit (say $500-1,000) as collateral, after which he’ll be issued a credit card with the same limit. He can then make purchases and pay the balance monthly in order to build credit. After a set amount of time (a year, perhaps) he’ll get his deposit back with interest and he can keep the card if he chooses.
5. Put a bill in his name. Nothing says reliability like someone who pays their bills, so putting some in your student’s name could help to build his credit. But be careful; not all bills qualify. While a landline could be used, a cell phone bill won’t help at all (since mobile carriers only report delinquencies to credit institutions). Utilities like water and power will also work, provided payments are made on time and in full. Students can seek the best deals on credit cards on sites like http://www.ratesupermarket.ca, but there are simpler ways to build credit than by risking the temptation of plastic. Putting bills in his name may be a safer way to help your student build credit in college.