Best ways to build credit while getting your PhD

Being in a PhD program means you’ve got a lot of responsibility for your education. You’re not given a syllabus or specific coursework to complete. Instead, you’re left to manage your education mostly on your own.

Your research isn’t the only thing you have to worry about, however. The expense of being a PhD candidate can quickly add up. A new computer, professional attire or even just regular living expenses can quickly eat any stipend you’re receiving from your school.

Learning how to build credit- and use it wisely- helps you worry less about your financial situation so you can focus on your thesis. 

Why it’s important for a PhD student to build credit

As a PhD candidate who’s investing a lot of time and energy in school, you may feel like you’re a little behind on some major financial milestones. Knowing what is good credit and building your credit while you’re in school puts you in a good position to catch up after graduation.

For example, if you intend to buy a house, you’ll need to have good credit. The higher your credit score, the more likely you get approved for a mortgage with favorable terms. Even if you’re planning to rent, it’s not uncommon for a landlord to check your credit.

Other major purchases require good credit as well. Trading in your old car for a new one usually means taking out an auto loan. Some manufacturers offer special financing offers with low interest rates for borrowers with good credit.

Additionally, credit cards and other revolving credit lines can be used to finance expensive purchases over a period of time. When used strategically, credit cards help you pay for new appliances or furniture without draining your savings.

Good credit is also essential to optimize the tools you use to pay for school. Approval for a Direct PLUS Loan from the U.S. Department of Education requires a credit check and no adverse credit history. Student loans aren’t the only choice to pay for education costs. According to the Federal Reserve, 24% of adults paying for their own education used a credit card to finance at least part of their education.

If you have little to no existing debt or credit history, it takes time to build credit. Starting while you’re still in school sets you up to have a strong credit history once you get your PhD and are ready to finance big purchases.

How to build credit as a student

Some ways to get started building your credit include:

  • Taking out a loan
  • Opening a credit card that’s ideal for students
  • Paying bills on time
  • Becoming an authorized user on a parent, partner or spouse’s credit card
  • Asking your landlord or utility company to report good payment history to credit bureaus

The best way to build credit is by opening a new credit account and paying your bill on time. Make sure you’re able to use your credit card wisely so you don’t wind up with unmanageable credit card debt. This means not making purchases on your card if you don’t have the means to pay your bill.

One strategy to avoid overspending with a credit card is to only use it for emergencies. Another easy way to keep from racking up too much credit card debt is to only put regular expenses on the card. By paying for things already in your budget, such as your internet or phone bills using your card, you’re building credit without spending extra money you don’t have.

Are there scholarships or nonprofit resources to help pay for school?

Many PhD programs grant students some form of a stipend, housing or other benefits to help curb costs. These benefits, however, often aren’t nearly enough.

In addition to the cost of tuition, you still need money to eat, get around town and cover your other expenses. Just like undergraduate programs, it’s possible to find scholarships specifically for PhD programs.

Some resources to search and find PhD scholarships include:

  • Unigo: This website has a database of available scholarships and a matching tool as well as financial resources for paying for a doctorate degree.
  • Scholarships.com: This site has a scholarship directory and plenty of financial aid resources for programs such as grants or fellowships.
  • FinAid: FinAid provides lots of financial aid information to students at all levels, including PhD students, to learn more about finding scholarships or loans.

You can also use fellowships and other university resources to help handle costs. When selecting your program, be sure to weigh the different options offered to you. You may be able to find a fellowship that covers most of your education costs. Be sure to check with your school’s financial aid office for any university-specific scholarships offered. Many schools provide scholarships for specific study areas.

In a nutshell

Learning how to build credit as a student sets you up for financial success after you receive your PhD. Get started building credit now by opening a credit account that you can easily manage. Use the card to pay for existing monthly expenses so you’re less likely to overspend.

Paying for a PhD can be difficult, but you may be able to use scholarships in addition to student loans. Find a scholarship using a directory and talk with the financial aid office at your university.

Tara Seboldt

Personal finance writer

Tara Seboldt is a personal finance writer based in Gooding, ID. When she’s not at her computer, she can usually be found in the mountains hiking or skiing. She happily shares her home with her Border Collie, two cats and one