While you’re busy building up your knowledge base, resume, and GPA in college, don't forget about your credit score. Why? Well, credit can open important doors for you like helping you get approved for a rental home or mortgage and helping you land a job (yes, employers in some states can check your credit).

By working on your credit while you’re still in college, you’ll be better prepared for life on your own beyond the dorms and classrooms. But how can you build credit without access to any credit? Figure Pay Credit Loans are designed to give you an easy access point.

Read on to learn all you need to know about Figure Pay and how it can help you build credit while still in college.

How Figure Pay Works

Building your credit score can often feel like a catch-22. To show you can use a credit line responsibly, you need to have access to one. But to have access to one, you often need proof you’ve managed credit well in the past. So where do you start?

Figure Pay solves this conundrum by giving people with little to no credit (or bad credit) an easy way to get started.

Figure Pay Credit Loans are installment loans that range from $10 to $2,500 which can be used in-store at any participating merchant. If you have credit established, you may be approved for a loan amount right off the bat. However, if you are like most college students and don’t have any credit, you will need to take the other route.

What is that other route?

You open a Figure Pay digital deposit and payment account (it’s FDIC-insured). Then, you deposit at least $1,200 per month for two months in a row. You can set up direct deposit with your account so that paychecks, government disbursements, etc. go right into the account. Once you’ve deposited the $2,400 total over two months, you will earn credit!

When you see you’re approved for a credit line, you can turn on “Loan Mode,” make a purchase (within a 30-minute window), pay with Figure Pay, and then repay the amount over a period of four months.

The loans are funded at the point of sale in the amount of the purchase. If you don’t spend the full amount for which you are approved, you can take out additional loans. However, all of the loans combined can’t exceed the total approved amount.

How Figure Pay Helps You Build Credit While at College

Now that you know what Figure Pay is, how can it help you build credit as a college student?

Let’s say you need to buy textbooks next semester and want to split the cost versus paying all at once. You apply for Figure Pay but aren’t immediately approved for credit because you have absolutely no credit history. However, you’re working part-time at a local coffee shop so set up your payments to go into a Figure Pay account.

After two months of depositing at least $1,200, you check your Figure Pay account and have a credit line available for use. When it comes time to buy the books, you head to the local shop that offers Figure Pay as a payment method. Before you walk in, you click on “Loan Mode.” Then, at check out, you use your Figure Pay Credit Loan to pay. You then have a repayment schedule with a term of four months.

Your installment loan and payments will be reported to the credit bureaus. As you make on-time payments, you will build a positive line of credit on your reports. This will help to demonstrate that you can manage credit responsibly and will increase your credit score.

How credit scores work

When looking at how FICO scores are calculated, here's how they work:

  • 35% of your score depends on your payment history
  • 30% depends on the amounts owed
  • 15% depends on the length of your credit history
  • 10% depends on your credit mix
  • 10% depends on your new account activity

Installment loans with Figure Pay can help you on all of these fronts as long as you make your payments on time. As you can see, the biggest factor is on-time payments so be sure you meet your payment due dates. Beyond that, beginning your credit history early is a smart move, as longer histories are preferred. However, they're not required to have a good credit score.

Installment accounts like Figure Pay offers are just one type of credit. It’s best to have account types including both installment and revolving credit products. Revolving credit accounts are those that you can pay off and use again — like credit cards. However, getting started with Figure Pay’s installment loan can help you to also get approved for a credit card with attractive rates and terms.

Lastly, while too much new account activity is seen as bad, opening a new account and then using it responsibly will do more good than harm. The problems come when you apply for numerous new credit products in a short amount of time.

The Credit for All Program Explained

Your credit score can determine your access to jobs, housing, transport, and even mobile phone service. Therefore, it's important for everyone to be able to build credit.

At Figure Pay, we want to improve credit accessibility to underbanked populations which include college students, immigrants, and those with insufficient credit history. We do this with our Credit for All program which is what enables those without credit to earn their credit lines. By depositing the minimum required amount of money into a Figure Pay account, almost anyone can earn credit no matter their age, credit missteps, or background.

We also aim to simplify lending by charging only simple interest so our users can avoid being stuck with debt and high compounding interest while building their credit scores.

A Win/Win: Graduate with A Degree and Good Credit!

As a college student, you no doubt have a lot on your plate so building credit may be on the back burner. However, it’s something that can open up many more options as you transition into adulthood. The good news is, with Figure Pay, it doesn’t have to take a whole lot of extra time or effort.

Most college students already deposit money into a bank account whether from a part-time job, government disbursements, or their parents. By depositing your money into a Figure Pay account, at least $1,200 for two months, you’ll have earned your first credit line. From there, it’s up to you to use it to make a purchase and ensure you pay it off on time. Before you know it, you can join the money who see their credit score rising as their available credit grows.

Then, when you graduate and it’s time to apply for a car loan, house, or job, you can do so with the confidence in knowing that your credit score has your back.

Don't wait, get started building your credit with Figure Pay today!