02/10/2013 11:32 BST

Student Money: How To Build Up A Good Credit Rating

One and a half million students feel financially unprepared for university, with a third of students overspending every few months, research has revealed.

A further nine in ten have some form of credit outside of their student loan, with many relying on credit to pay for everyday living.

Experian Credit Expert, who conducted the study, warned poor credit management could actually negatively impact future financial independence, and offered some top tips on what students need to know about credit rating:

1. How it all works

When you start using credit facilities, such as overdrafts, credit cards and even mobile phone contracts, information on how you manage these credit facilities will appear in your credit report. Your credit report will help lenders access your credit worthiness into the future based on how well you have managed credit over the last six years.

2. Building up a picture

When you apply for credit, your name and address will be checked against the electoral roll so that the lender can be sure that you are who you say you are and live where you say you live. Whatever you do, it is essential you register to vote somewhere, even at your parents’ home and give that exact address when you apply for credit.

3. Information about other people

Your credit history can only be linked to other people if you have a financial link with them. Paying the rent together doesn’t count, although you will be linked to people you share with if you put multiple names on a credit agreement such as an electricity bill.

4. Think before you borrow

If you are a student, you’ll probably take advantage of one of the special bank accounts on offer many of which include interest-free overdrafts, but remember that you will need to pay the money back when your course ends. Never go over your overdraft limit without permission from your bank. Always speak to your bank if you are struggling.

5. Don’t forget to budget

To build up a good credit history you must make all your payments on time. How you manage any credit you have now will affect your chance of getting credit in the future. So use credit wisely and budget to make sure you don’t spend too much.