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Finance tips for students

Get money smart and learn simple steps you can take to build your financial future, even whilst still at school.
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Written by Team Aqua
Published on September 27th, 2022
Last reviewed on September 20th, 2023
6 mins read

Budgeting your money

Starting university is an exciting yet daunting step towards adulthood. You’re entering a new realm of responsibility and establishing financial independence for the first time. As a new student, you don’t want to spend time worrying about money, therefore, it’s important to understand what financial factors might impact you and how to create an effective budget. That way you can spend more time on your studies and embracing university life.

While financial independence may seem daunting, it doesn’t have to be. Understanding not only what credit is but how to build a strong credit score, and how to implement a personal budget are essential parts of anyone’s financial journey. Once you’ve established these elements of your finances you’ll have a better understanding of the benefits of having a good credit score and the importance of financial wellbeing.

To help you achieve both an effective budget and build a good credit score, we’ve put together a guide to help you stay on top of your finances and build a strong foundation for your financial future.

What is a credit score and why is it important for students?

Simply put, a credit score is a number that reflects how reliable you are when it comes to repaying borrowed money. Your credit score is based on financial data points indicating how consistent and responsible you’ve been with borrowing in the past. The higher your score, the more trustworthy you appear to lenders.

You might think that a credit score is something to worry about later in life, but if you are ever looking to get a credit card, take out a loan, apply for a mortgage, or even get a car on finance, a good credit score can increase your chances of approval at a good rate, and give you options to choose from. So, why not get a jumpstart on your future and learn ways you can start improving your credit score as a student? Read on for our top tips.

How can you improve your credit score as a student?

Most students won’t have a credit history, so they’re essentially starting with a blank slate. Luckily, student loans don’t factor into your credit score which means you won’t appear to have any borrowing yet that could affect the credit limit you’re offered. Below are five simple steps that all students can take to start building a good credit score.

1. Join the electoral roll

If you’ve moved into student accommodation, or a shared house, joining the electoral roll for your new area is an easy way to give your credit score a boost. This can help with your credit score as it allows lenders to confirm your identity and that the details you’ve provided are accurate. You can do this online, and sometimes you are even able to register for two residences - your term time and home addresses.

2. Pay your bills on time

It might seem obvious but paying your bills on time is really important. As a student, you may not be paying for things such as gas, electricity, and water, directly, but ensuring that any outgoings you do have are paid on time is vital. Even a mobile phone contract can show up on your credit file, and late payments can harm your credit score. Setting up direct debits is an easy way to ensure you don’t miss a payment.

3. Don’t repeatedly apply for credit

Whenever you apply for any kind of credit, whether it’s a credit card or loan, it gets recorded on your credit file. Applying for lots of credit within a short space of time will negatively impact your credit score, as it makes you appear credit-hungry to lenders. Make sure you check your eligibility first to see if you have a good chance of being accepted before making an application. If you are rejected, wait a few months before making another application.

4. Check your details

Knowing your credit score will help you understand if you need to take further action to improve it. You can check your credit score for free with different credit reference agencies to ensure your details are correct and find out what your score is.

5. Consider getting a credit card and manage it well

While some people might say it’s best to avoid credit cards, they’re an effective way of boosting your credit score if you make your repayments on time and stay within your credit limit. This will help build your credit score, getting you ready for big milestones later, such as getting a mortgage.

Top budgeting tips for students

If you’re living off a student loan, it can be tricky to know how best to manage it so that it lasts until your next payment. A personal budget will help simplify things, freeing you up to focus on your studies and making the most of your time at university.

We’ve pulled together our top five tips to help you start budgeting effectively so that you don’t have to compromise or worry about money.

1. Know your income

With student loan instalments coming at the start of each term, it’s easy to think your money will go a long way and spend too much at the start. To avoid this, the first thing you need to do is establish what your income is by adding up your loan, any grants, bursaries, money from parents, weekend jobs etc. Then you can deduct your essential outgoings to see how much you’ll have left for socialising, household supplies and any course materials you might need.

2. Find out what you can get for free

As a student, there are some things you either don’t have to pay for (such as council tax) or can get at a reduced price. Taking advantage of free local and student events is a great way to explore and have fun without overspending on entertainment.

3. Shop smart

A massive perk of being a student is having access to student discounts. Utilising discount platform, such as Unidays, where you can get markdowns on clothes, shops, restaurants and activities can help cut the cost of your everyday spending.

4. Save on travel where possible

Travelling to university can be a big expense if you don’t live within walking distance of your campus, so taking advantage of railcards, coach cards, and student Oyster cards is a great way to make savings every day.

5. Save for a rainy day (or a big purchase)

Do you have your eyes set on a big ticket item, such as a new TV? Divide the cost of the item over a longer period of time, such as six months, to break it up into manageable-sized chunks, and save a bit each month. This is also a great way to save up a ‘rainy day fund’ for unexpected costs, such as needing a new mobile phone or laptop.

Sharvan Selvam, Commercial Director at Aqua, commented: “As a student, managing your own money can be overwhelming, but it doesn’t need to be. Follow these simple steps to create healthy financial habits that can benefit you not only during your time at university but also after you graduate when having a good credit score will help you achieve big life milestones, such as getting a mortgage.”

Aqua strives to help you build better credit no matter your financial situation. We aim to give people a chance by saying yes responsibly when other lenders may say no and provide the right tools and support to help you on your way towards a better credit score. Since 2002, we’ve said yes to over 2 million people so they can start their journey towards better credit.

Representative 34.9% APR variable for Aqua Classic.

Failure to make payments on time or to stay within your credit limit means that you will pay additional charges and may make obtaining credit in the future more expensive and difficult.

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Team Aqua

Aqua’s contributors are experts in their field, from a range of backgrounds including banking and lending.

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Failure to make payments on time or to stay within your credit limit means that you will pay additional charges and may make obtaining credit in the future more expensive and difficult.

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