Try to help a Friend

[corymcd88]

A women that I work with would like to build credit, she is 20. What does she need to do because of the card act of 2010? I told her about two credit union that I know and like. Penfed and Midflorida. I told her one Credit card, one store card, one small loan to help her out. What do you think?

[eviLution]

Don't you need at least 6 months of credit history first in order to get a store card?

[chnceit]

She should get at least two secured cards; one having a higher limit to better chance of getting a higher CL when applying for an unsecured CC.

FICO scores will not generate until 6 months of history.  

[eviLution]

+1

I wouldn't try for a store card until a Fico score is generated.

[corymcd88]

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@eviLution wrote:

Don't you need at least 6 months of credit history first in order to get a store card?

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Yep, I said after 6m is what I ment.

[LS2982]

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@corymcd88 wrote:

A women that I work with would like to build credit, she is 20. What does she need to do because of the card act of 2010? I told her about two credit union that I know and like. Penfed and Midflorida. I told her one Credit card, one store card, one small loan to help her out. What do you think?

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Not a good choice for a CC with no credit history. Would be good to get a bank account with and establish a history tho.

[maceto]

Do you have an amex account? Add her as an AU and set a limit (she can pay a deposit to you) will then be able to apply for amex in 6 months+, better yet add her to a City or Chase- make sure SSN is added and activate card- to then throw it away.. As it will backdate her to when you opened the cards, but not give her any access to your money or able to F!€&. up anything for you... Trust me, works wonders.. I have a credit history from 2003, but arrived in the US late 2011.. So I am as good as most people here, but cheated my way there ;-)

[bichonmom]

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@maceto wrote:
Do you have an amex account? Add her as an AU and set a limit (she can pay a deposit to you) will then be able to apply for amex in 6 months+, better yet add her to a City or Chase- make sure SSN is added and activate card- to then throw it away.. As it will backdate her to when you opened the cards, but not give her any access to your money or able to F!€&. up anything for you... Trust me, works wonders.. I have a credit history from 2003, but arrived in the US late 2011.. So I am as good as most people here, but cheated my way there ;-)

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This is a dangerous move, IMO.

If she's 20, she could look into student cards since they have lower criteria for approval.

Also, a secured card and/or installment loan is a good way to start and build credit. The benefit of a loan is that it doesn't affect your cash flow since you immediately "borrow" the money you deposit into the bank. The interest on that type of loan is typically VERY low, so it's an inexpensive way to generate a FICO and establish positive TL.

A secured card will give her revolving history, which is important. The downside is that it does affect your cash flow since the deposit they hold is your CL.

She could open 2 secured loans and then app for a GEMB store card after her FICO has been generated. That will get her revolving credit establishing w/o affecting her cash flow. She'll then have 3 pos TLs reporting.

[Anonymous]

As I understand, the Card Act requires a bank to obtain "proof" of the ability to pay of anyone under 21. The interpretation of "proof of income" allows the use of the income number the applicant entered on his/her application...so the law doesn't really limit the ability of anyone under 21 to obtain credit. This is confirmed by my personal experience, as I have opened card accounts without any issues due to my age.

My first two cards (when I was 18 with no credit history) were with banks with which I had checking accounts. I was originally denied for both, but recieved cards with small ~$300 credit lines after asking for a recon. I was eventually able to grow these cards with periodic CLI about every 6 months, and got other credit cards after establishing enough credit history.

In short, I recomend she gets cards with whatever bank she is a customer of, knowing she may be denied and have to request a recon in the process.