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Dotty
Posts: 6
Registered: ‎02-20-2008
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How to start building credit ( for my 18 year old)

Have an 18 year old who is going overseas in Sept  on a 1 year scholarship, then to college when she gets back fall 2011.

Want to start building her credit. Whats the best first move?

Established Contributor
ifinet
Posts: 552
Registered: ‎03-17-2010
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Re: How to start building credit ( for my 18 year old)

[ Edited ]

I mean no disrespect, but your post should be in this forum instead.

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fused
Posts: 16,374
Registered: ‎03-12-2007
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Re: How to start building credit ( for my 18 year old)

Moving to general credit topics forum...

Credit Profile -
FICO 08 Scores (09-16-2014): EQ 824, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1 (Amex 07-15-2014)

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credit2credit
Posts: 4
Registered: ‎07-13-2010
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Re: How to start building credit ( for my 18 year old)

Dott

Apply for a credit card thats secure make sure they report to all 3 major credit

bureaus each month or in most cases every 3 months make your payment on time

and use the card thats the key. Sears is another company who reports oftem.

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Epic Contributor
haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007
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Re: How to start building credit ( for my 18 year old)

[ Edited ]

Hi, Dotty, is your daughter's college/ university affiliated with a credit union? Or are there local credit unions that she can join, which offer credit cards? If so, have her join up and establish some sort of regular business, like a monthly automatic deposit into a share (savings) account. CU's are a great way to start out.

 

Since she is under 21, and I assume that she doesn't have an income (at least while she's overseas), you or another adult will need to co-sign for any credit application. This was a dreadful idea that snuck onto the Credit Card Act, because it means that your credit will be on the hook for her card, including any abuse by potential roommates, BF/GF's, you name it. (Including her.) You can make her an AU (authorized user) on one of your cards, ideally one that is old, squeaky clean, and reports $0 every month. You can give her an AU card and monitor the usage, or you can just let it report on her reports. Do make sure that the card will report AU's on their reports --not all CC's will do so.

 

If you wind up co-signing for a CC, I would advise that you tell her that on her 21st birthday, when she is eligible for credit under her own name, it will be closed. By then, she should be able to qualify for credit on her own. In the meantime, set up the account so that you can pull it up online once a week or so and make sure that it is being paid. It WILL show up on your credit reports, good, bad, and ugly.

 

Things happen with college-aged kids. I love my three kids dearly, and I think that overall, they are very responsible young adults, but that didn't keep 2 of 3 of them from having late payments on their credit reports. I take responsibility for my own screw-ups, but I'm sure not letting anyone else's mistakes hurt my own credit!

 

Anyway, hope that helps and that she has a fantastic time overseas. What a great "gap year" activity before starting college!

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
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AndySoCal
Posts: 1,899
Registered: ‎04-07-2009
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Re: How to start building credit ( for my 18 year old)

Here couple ideas. One if your bank or credit union offer a secured credit card set up for her. The other idea would be make her an authorized user on a credit card like a Visa or Mastercard. 

Equifax My FICO score 815 5/28/2012, 818 on 7/28/2014 . Average of Accounts 12 years and no Installment accounts. MyFICO TU 810 6/26/2012 809 4/21/2013 MyFICO XPN -805. 2/26/2014 Discover TU FICO 813 App free since 9/2011

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