Building up credit score as a 22-year old.

Hi Shawn,

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From what I understand, I'd say the credit system works in largely the same way as in the US. Of course, there are specificities that differ, but the idea of how it works is more or less the same.

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Personally, I think it's worth it. Building up credit score only has benefits and has no downsides (to me). Many people list benefits like getting a better loan term for when you actually apply for a home loan/car loan, but I think one more immediate benefit is being able to apply for a regular credit card when you start working.

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We take it for granted that we should be eligible for credit cards as long as we meet the income requirement, but that's not always the case. If your credit score is unknown (ie you have never owned credit), banks don't know how to assess your risk to them and they may not want to let you apply for a credit card with them. So it may actually lead to the issue where when you want to start using a credit card to build credit score, you don't have the avenue to do so.

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You're right that student credit cards are mediocre. That's why I don't use it for my main expenses, but I use a debit card instead. I only use my student credit card once a month for a cheap expense to accumulate on-time payments and thus build up my credit score. This has helped me get a credit rating of AA even as a student.

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To decide which student card to apply for, I did it by deciding which regular bank credit cards will I definitely not want to use when I start working. This is so that I will be able to apply for regular credit cards as a "new-to-bank" customer and enjoy signup rewards. Being a cardholder, even for a student credit card, you will be considered an existing customer and not be eligible for such promotions. Based on this, I concluded that CIMB AWSM is the card I will apply because their credit cards are not attractive to me.

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Hope this helps!

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Regards,

thefrugalstudent