How to build credit as a pre-med student

Looking forward to the next eight to ten years as a pre-med student will bring up a variety of emotions. It’s normal to feel a mixture of excitement and uncertainty. One aspect that you may be uncertain about is building a strong financial foundation as a student. Having good credit opens up more lanes for you to make substantial life purchases, like a car and a home.  

Most med students find it hard enough to manage their work schedules, let alone find time to build good enough credit for the future. Fortunately, there are several ways you can begin to build credit as a pre-med student.

Why it’s important to build credit

As a pre-med student, you may be wondering why it’s important to build credit now when you haven’t even thought about making a lot of these big purchases yet. Building your credit earlier in life can make a lot of these decisions easier. In general, your credit history shows your ability to pay your debts. The higher your credit score, the more likely that lenders will qualify you for loans to make major purchases. 

If you’re able to pay for larger purchases with cash, that’s definitely the way to go. But for those who can’t pay out-of-pocket, credit offers the option to pay off these purchases over time, with interest. Better yet, good credit means you’re eligible for lower interest rates, so you’ll be spending less money overall. 

A good credit score could also help you get approved for more student loans. Since a medical track is a long-term commitment, you’ll need to make a plan to finance your daily living expenses before graduation. Further down the road, you may also need to purchase your medical equipment that can be too costly without credit. 

How to build good credit

Here are some simple ways you can begin to build credit now as a pre-med student:

  1. Open a credit card

While opening a credit card is one of the best ways to build credit, unfortunately, many companies have tried to target students to make decisions before they’re ready. Luckily, regulations have been put in place so that these companies aren’t able to target anyone under 21

While it may seem like opening a card is easy, it’s important to do your research and find a card that fits your needs. As a student, this will likely be something with low-interest rates and fees. To open the card, you’ll either need a steady income or a cosigner, which could be your parents or another loved one that you trust. One reputable card option is Discover it Student Cash Back, which is well-known for providing great choices to students.

2. Use your card wisely

Many students make the mistake of believing their credit cards are free money to use whenever they please. Other students think that cards should be used for emergencies only. In the former case, you’re piling on debt, and in the latter, your account will likely get deactivated due to inactivity. The best way to start using your card is on small, consistent purchases that you know you can pay off. Some good examples are gas and transportation costs, groceries or utilities. 

3. Make timely payments

Making your payments on time is one of the most important aspects of owning a credit card. Failure to do so will harm your credit score and cost you in the long-run. You should treat your credit card bill just like any other recurring payment, similar to your rent and utilities so that you’re consistently making timely payments each month.

4. Remain consistent with your other bills

Though your other bills don’t always factor into your credit score, they could become a bigger consideration for certain loans or purchases. If you’re paying your rent, utilities and insurance on time, it’s a good indicator that you’re similarly responsible for paying off loan and credit debt. 

Additional financial aid options

Establishing your credit now will make your future decisions a little easier, but it’s important to remember that credit works best when you use it within your means. So, finding additional supplemental payment methods now – like federal student aid – will help you in the long run.

The first place to start is the FAFSA, which is the free application for federal student aid at the school you’re attending. The aid you receive through FAFSA is dependent on a host of factors, such as your income and dependency, and it’s also granted on a first-come first-served basis.

Similarly, there’s plenty of private aid that’s given based on a number of criteria. Specific scholarship programs, like the Health Professions Scholarship Program is a public service program that provides funds through the U.S. Army, Navy, and Air Force. These are comprehensive scholarships offered in one, three and four-year increments. If you’re eligible to serve and join a service branch, you’ll receive tuition for medical school as well as a monthly stipend. 

In a nutshell

Your pre-med career will help lay the foundation for what you’ll study in medical school. While it’s a great time of educational growth, you can also leverage the time for financial growth. Though it may feel like a lot right now, understanding the best ways to build good credit now will make things a little less daunting later. 

Claire Bough

Personal finance writer

Claire is a writer and content strategist. She currently lives in Nashville, TN where she loves trying the multitude of new restaurants and traveling throughout the South. For more about Claire, visit her LinkedIn.