<p>I recently asked my financial aid office a question like this among a few other questions about the payment plan & this was the only question not answered...I couldn't find any info, so I figured I would ask here. I don't have any credit so I was just wondering if the payment plan helps with earning/building credit. Thanks in advance for any help!</p>
<p>I doubt it. You are not taking a loan. You are spreading your payments over a number of months. There is a difference.</p>
<p>If your school uses an outside vendor to extend the credit (make the loan to you) and collect the payments, then that outside agency may indeed report to the credit agencies. But, is the payment play in the name of the student or the parent? It’s the name on the account that would be the one building credit.</p>
<p>It unlikely, but possible, that a school would report payments and collections to the credit agencies. Reporting is the key.</p>
<p>When my college senior opened a new checking account at a big-name bank, he was offered an application for a pretty good credit card that had nice features. He chose to apply for it. It was the first credit card he ever applied for. The bank employee took down all of his information, including other bank accounts, loans, payments, previous addresses, etc, and told us, “Every now and then, young people are given this card on the spot. But that’s not too common. Most of the time, it takes (can’t remember – up to 48 hours?) before we hear back. So, I’ll hit ‘submit’ now, but don’t be too worried if you’re not immediately approved.” Well, he was approved about 10-15 seconds later. The woman acted surprised. I do not know if she was buttering us up for some reason, or if it really is unusual for a young person to get approved for that card right away. Forgive me if my naiveté is showing!! 
Anyway, the bank employee did act surprised, and she said that she thought that his early college loan payments made the difference. (They were unsubsidized federal loans.) He wasn’t under any obligation to repay them yet, since he was still in college, but he had made small payments when he could. He really had nothing other than utility bills from his apartment to prove his creditworthiness (do utility bills still do that?), plus a fairly long-standing credit union savings and checking account that had no real “credit” features. </p>