How Early Can I Start Building My Credit History?


  • How to Build your Credit History from as early as your college days?
  • Know about Student Credit Cards, Two-wheeler Loans, Consumer Durable Loans that can help build your credit history

When we talk about the financial life of any individual, one of its most important aspects is the Credit History. The credit history of an individual will consist of many things, such as Loan EMIs, Credit card bills, utility bills, and a few other transactions. Based on this credit history, credit bureaus like CIBIL and others determine an individual’s credit score. So, what is the importance of your credit history? Well, when you opt for any unsecured loans (where you don’t need to pledge any kind of security), the first thing that a lender check is your credit score. And your credit score gets affected by how your credit history is. If you have been paying all your dues on time, you must have a good credit history and thus you’ll have a good credit score and vice-versa.

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Suppose you decide to opt for a personal loan and the lender rejected your application because you don’t have a credit history. So, what can you do now? Well, the first thing that you should know that the credit history doesn’t build overnight; it takes a substantial time to build a credit history and an individual can start building it from as early as his/her college days. In this article, we will tell you several ways by which you can build your credit history from scratch. This will help you in getting any kind of credit from a lender in the future. So, without any further delay, let’s start reading!

Let’s Know about Ways to Build Credit History in Detail!

As we told, credit history is something that you build over an extended period and it should ideally begin at a very early age which can be the time when you are studying in college. This will help you mainly in two things — First, it will cultivate a good habit of managing your credit with responsibility and second, you will have an extended credit history by the time you will start your job or business. So, there are several ways to build your credit history from scratch such as opting for a Student Credit Card, Opting for a two-wheeler loan when you get in a job, consumer durable loan, etc.

First, we will talk about the Student Credit Card as it is the first step towards building your credit history from scratch. Have a look at all the details related to it below.

Opt for Student Credit Cards

Credit cards are one of the methods to build your credit history. But individuals who are still in their college cannot opt for simple credit cards because of the strict eligibility criteria. So, there are several banks that provide Student Credit Cards to those studying in colleges and want to build their credit history from scratch. With a student credit card, students who are not earning yet can manage their expenses on their own. When they transact with their credit card across different categories, they will be able to build their credit history in the process. This will help them in getting credit from lenders at affordable interest rates, provided they pay their bills on time.

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But it doesn’t mean that every student can obtain a student credit card from a bank. Each lender has predefined eligibility criteria that an individual has to meet before opting for a credit card. And the eligibility can be different from one lender to another. Some of the leading banks that provide Student Credit Cards are State Bank of India (SBI), Bank of Baroda (BOB), and ICICI Bank. We are providing details about some of the top student credit cards below so that you can have a better understanding of them.

SBI Student Plus Advantage Credit Card

This exclusive SBI student credit card can be availed by the customers who have taken an education loan from the SBI. Apart from this, the SBI Student Plus Advantage credit card can be availed by opening a fixed deposit at any of the SBI branches. A student can easily opt for this credit card to build his or her credit history from scratch. There are so many additional features of this credit card, such as 1 reward point for every INR 100 spent, 10x reward points on international spending. You can use these reward points to pay your outstanding balance or you can redeem them against a range of gifts.

On spending INR 35,000 in a year, your annual fee will be waived off. You need to remember only one thing that you need to be above 18 years of age to opt for this card. If you are not below 18 years of age, you will get an add-on card and your parents will get an add-on card.

ICICI Bank Student Credit Card

This ICICI student credit card can also help build your credit history from scratch. This card provides several joining benefits to the students, such as membership of the International Student Identity Card (ISIC) worth IRN 590, Shopping Vouchers from Croma, Card Protection plus insurance worth INR 1,600, 40% discount on the excess baggage, 20% discount on every courier service by DHL, etc.

You will need to pay a joining fee worth INR 499 for this student credit card while the annual fee from the second year onwards will be INR 199 and it will also include annual benefits.

Bank of Baroda Prime Credit Card

If you are looking to build your credit history from the beginning, you can opt for this BOB Prime credit card against a minimum Fixed Deposit of INR 15,000. You don’t need any income proof to get this credit card. This card from BOB will give you a 1% cashback on all the spending made with the card. How? Well, you will get 4 reward points on every INR 100 spent and these 4 reward points will be equal to INR 1 when you redeem them. Apart from this, you will not need to pay any fuel surcharge if you use your card on fuel transactions.

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The best thing about this card is that you don’t need to pay any fees for this card. This student credit card from BOB is lifetime free. If you pay the bills on time, your credit history will build in a better way.

Opt for Two-Wheeler Loans

Two-wheeler loans can also be a method by which you can build your credit history from scratch. So, after graduating from your college, how can you keep building your credit history? Well, after college you must be getting a job. There are some jobs where it is a must to have a two-wheeler. And there are several banks and financial institutions that provide the Two-wheeler loan at affordable interest rates. For some reason, if you did not have a student credit card during your college days, now would be the perfect time to take care of your credit history.

So, either way, a two-wheeler loan can be a suitable option for you if you want to build your credit history. With the two-wheeler loan, you can easily opt for the required loan amount for a fixed tenure. When you will repay the loan via Equated Monthly Installments (EMI) on time, your credit history will build efficiently. With a two-wheeler loan, you can get a loan amount upto 100% of the on-road price of the vehicle. However, this may change from one lender to another. So, we are showing you some of the top lenders that provide two-wheeler loans. Have a look!

SBI Two-Wheeler Loan

With the help of the SBI Two-wheeler loan, you can opt for a loan amount as low as INR 30,000 and it can go upto a maximum of INR 2,50,000 to purchase the new-two wheelers of your choice. If you want to get the loan amount above INR 2.5 lakh, you will need to opt for the SBI Super Bike Scheme. Interest rates range from 10.25% to 16.05% per annum.

SBI provides loans upto 75% of the on-road price of the vehicle which means you will need to pay a minimum of 25 % of the on-road price from yourself. The loan amount can be repaid within a maximum tenure of 3 years. You must be earning a minimum monthly income of INR 12,500 to opt for this SBI two-wheeler loan. So, keep this thing in mind.

HDFC Two-Wheeler Loan

HDFC is the leading private bank of India and with its two-wheeler loan, you can choose the repayment period as short as 12 months which can be as long as 48 months. You can choose this according to your repayment capacity. The EMI will be pocket-friendly to you because of the affordable interest rates. The best thing about this loan is if you are an existing HDFC customer then you can get upto 100% finance on selected models. They will also get a 2% lower rate of interest and a 50% lower processing fee as compared to non-HDFC customers.

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The annual gross income is fixed at INR 84,000 and INR 72,00 for salaried and self-employed individuals, respectively, to be eligible for this loan. An individual must have been working for a minimum of 1 year. So, these conditions need to be fulfilled to get the HDFC two-wheeler loan.

Bank of Baroda (BOB) Two-Wheeler Loan

Looking for affordable interest rates on the two-wheeler loan? Bank of Baroda could be a suitable option for you because of the affordable interest rates ranging from 7.10% to 11.10% per annum. With the BOB two-wheeler loan, you can get upto INR 10 lakh with the maximum repayment period of 60 months. You can easily repay the loan in easy installments and build your credit history along with it.

You can also prepay your two-wheeler loan without paying any extra prepayment charges. Also, if the loan amount is above INR 3 lakh, you would be able to get upto 90% of the price of the two-wheeler. Whereas for two-wheelers above INR 3 lakh, you could get upto 85% of the overall price.

Opt for Consumer Durable Loans

Apart from Student Credit Cards and Two-wheeler loans, a consumer durable loan could also be a good way to build your credit history. With the help of a consumer durable loan, you can opt for the loan amount at affordable interest rates to purchase household appliances, electronic goods, and gadgets, etc. With a consumer durable loan, you could purchase anything from Television to Laptop.

After purchasing the durables with your loan amount, you can easily repay the loan via Equated Monthly Installments (EMI) within a tenure of 8 to 36 months. Before giving you the consumer durable loans, every lender checks your monthly income to have an estimate about your repayment capacity. The interest rates usually range from 12% to 22% per annum and change from one lender to another. There are some lenders that also offer a 0% interest rate on the consumer durable loans as part of their promotional offerings.

There are several lenders that provide the consumer durable loans and you should compare all the lenders based on interest rates, processing fees, tenure, and other factors. After this only, you should make a decision. On paying the EMIs on time, your credit history will have a positive impact and your credit score will also improve.

Personal Loan Interest Rates March 2024
HDFC Bank10.75% - 14.50%
ICICI Bank10.75% - 19.00%
IndusInd Bank10.25% - 26.00%
Kotak Bank10.99%
RBL14.00% - 23.00%
SMFG India Credit12.00% - 24.00%
Standard Chartered Bank11.49%
Tata Capital10.50% - 24.00%
Home Loan Interest Rates March 2024
Axis Bank8.75% - 9.15%
Bank of Baroda8.50% - 10.60%
Citibank8.75% - 9.15%
HDFC8.50% - 9.40%
ICICI Bank9.00% - 9.85%
Indiabulls Housing Finance Limited8.65%
Kotak Bank8.70%
LIC Housing8.50% - 10.50%
Piramal Capital & Housing Finance10.50%
PNB Housing Finance8.50% - 10.95%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI9.10% - 9.65%
Tata Capital8.95% - 12.00%