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Established Member
jubilee08
Posts: 14
Registered: ‎08-11-2008
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Young Adults establishing credit

I have a son, age 19, who is a full-time college student and has a steady part-time job, and is interested in establishing credit.  He has a checking account with a debit card/Visa, and that's it.  What is the fastest way for him to establish credit and obtain a good FICO score.  He would like to buy his first home as soon as practical.

 

Any good actual experience and advice would be greatly appreciated!

Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
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Re: Young Adults establishing credit

I don't know in this climate but my children all had no problems getting Citi cards. Capital One is easy.
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haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007
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Re: Young Adults establishing credit


jubilee08 wrote:

I have a son, age 19, who is a full-time college student and has a steady part-time job, and is interested in establishing credit.  He has a checking account with a debit card/Visa, and that's it.  What is the fastest way for him to establish credit and obtain a good FICO score.  He would like to buy his first home as soon as practical.

 

Any good actual experience and advice would be greatly appreciated!


Tell him to check out a local credit union. Also, have him talk to an officer at the bank where he already does business. He might find it worthwhile to buy his FICO Equifax score here (first google fico discount code coupon for at least 15% off), print it out, and take it with him. They would have to do a hard inq for a real application, but they ought to be able to give him an educated guess off of a credit report dated that day or maybe one day earlier.

Also, Bank of America has a great secured credit card, but BofA is in a world of hurt right now, and if they get broken up, I don't know what's going to happen to their CC line, especially their secured cards.
* 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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bsteelhammer
Posts: 8
Registered: ‎06-13-2007
0

Re: Young Adults establishing credit

My daughter is a freshman in college this year and we have been through this recently. Realizing how important the age of accounts is to ones credit score, we thought that the earlier we could get her started (and educated on the proper use of credit) the better off she would be.

 

Without 6 months of credit history, I don't believe you can get a FICO score at all, so I would disregard that.

 

My daughter first tried to apply for a Capital One Student Visa and was denied, due to limited credit history. My wife and I each added her as an authorised user to one of our cards, our two oldest cards with very low balances. This granted her cards to use in an emergency as well as beginning her credit account creation with the agencies.

 

After about 2 months, to make sure her credit accounts were created and updated with the AU accounts she re-applied and was approved for a Capital One card with a respectable limit considering her age and lack of credit history. Every conversation with her reinforces responsible use of credit, and I believe she is taking it to heart. So far, she has only used her card enough to comply with the requirements for the first CLI from Capital One (use within 30 days, never be late for a 50% limit increase).

 

My early adult years did not include much of an education in the importance of ones credit profile, so I am determined that she will learn from my mistakes and take her credit very seriously.

 

 

Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
0

Re: Young Adults establishing credit


haulingthescoreup wrote:

jubilee08 wrote:

I have a son, age 19, who is a full-time college student and has a steady part-time job, and is interested in establishing credit.  He has a checking account with a debit card/Visa, and that's it.  What is the fastest way for him to establish credit and obtain a good FICO score.  He would like to buy his first home as soon as practical.

 

Any good actual experience and advice would be greatly appreciated!


Tell him to check out a local credit union. Also, have him talk to an officer at the bank where he already does business. He might find it worthwhile to buy his FICO Equifax score here (first google fico discount code coupon for at least 15% off), print it out, and take it with him. They would have to do a hard inq for a real application, but they ought to be able to give him an educated guess off of a credit report dated that day or maybe one day earlier.

Also, Bank of America has a great secured credit card, but BofA is in a world of hurt right now, and if they get broken up, I don't know what's going to happen to their CC line, especially their secured cards.

BofA is very touch andgo right now. I would avoid them as much as I hate to say it.

Senior Contributor
txjohn
Posts: 4,214
Registered: ‎09-12-2008
0

Re: Young Adults establishing credit

An AU card from parents can be a good kick start to get a credit file started.  Although Fair Isaac originally was going to diregard AU cards in their new 08 algorithms, they have curtailed that and will continue to give some credit to "legitimate" AU holders, though not as much as previously.

 

Secured cards are a good starter also.  Go with a prime if you can, such as BoA or similar to avoid the ridiculous fees.

 

Amalgamated Bank of Chicago has a great secured program too, and I don't think I ever see them mentioned here.  They are a prime lender and they have a secured card program up to $15k.  Secured cards also provide the assurance that he credit newbie doesn't get in over their heads.

 

Proper education is important.  I have a brother who got a bunch of the "easy credit" while at school and now he is suffereing from the irresponsible use. 

 

Capital One and HSBC have traditionally been some of the easier cards to get.  However, the rules have changed and only time will tell how they go.

 

So, if parents can, put the kid as an AU on one of your oldest cards with low utilization.  Consider a secured card with BoA or Amalgamated.  Possibly a CU would be good, especially if the parents are long time members.  Years ago, my first card was a CU, and I was able to sit face to face with my personal accont rep and say "I want a Visa" and she asked, how much limit, looked at my records and said "Okay."  Those were the days....real people.

 

Good luck!

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New Member
payson23
Posts: 4
Registered: ‎03-24-2008
0

Re: Young Adults establishing credit

Most local credit unions offer great student visas with extremely low, fixed interest rates considering their age and risk factors. Also, if you yourself have good credit (great credit really), you might consider adding him as an authorized user on your longest in good standing credit card. His credit history will go back to whenever you opened that card, which can actually predate his birth. Its a really good way to kickstart his credit so that he can get better interest rates when he starts getting his own credit cards.

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