Oct 22, 2016 11:13 AM EDT By Emily Marks, UniversityHerald Reporter

Fresh graduates need to learn that establishing a good credit record is part of a stable financial management plan. It can be tricky, though, and millennials need to be responsible in using credit cards for purchases.

It was reported that a lot of students are squandering their loan funds on non-educational expenses such as vacations, eating out at restaurants, buying new clothes and car payments. There are 3 percent who spent their student loan money on alcohol and drugs. The greatest share, with 41 percent, spent it on monthly bills such as mobile phones.

Apparently, some students believe that once they earn their degree and land a high-paying job, they can easily repay their loans. However, they are not thinking of the interest that will only rise.

This is not a good way to practice responsible financial management. For fresh graduates, it may be hard to establish a good credit record if they don't have a credit history.

USA Today College reported that one's credit report is like a financial report card. It shows how you handle borrowed money. It also includes details on whether you have paid bills on time.

According to Nerd Wallet, fresh graduates can establish credit by applying for a secured credit card. This is backed by a cash deposit that you pay upfront. The deposited amount is usually the same as your credit limit.

Another way to establish credit is to apply for a credit-builder loan. This is when the money you borrow is held by the lender in an account which will not be released until the loan has been repaid.

Getting a co-signer can also help you with your credit record. Becoming an authorized user on someone else's credit card is one way of building credit history as well.

Lastly, you can get credit for your rent. Services such as Rental Kharma and RentTrack take a bill that you are currently paying for and put it on your credit report. This can help build a positive history of payments.

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