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Best way to help DS’s credit when buying him a car?

SPChaser
Frequent Contributor

Best way to help DS’s credit when buying him a car?

I'm not sure how to go about this. I plan on getting my 18 year-old son a car, and I also want to help grow his credit at the same time. To build his credit, would I be able to have him as a secondary or any other suggestions? 

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Message 1 of 14
13 REPLIES 13
James_A
Valued Contributor

Re: Best way to help DS’s credit when buying him a car?


@SPChaser wrote:

I'm not sure how to go about this. I plan on getting my 18 year-old son a car, and I also want to help grow his credit at the same time. To build his credit, would I be able to have him as a secondary or any other suggestions? 


I would think he should take out the loan with you as guarantor. DS gets loan in his name + Lender gets secondary guarantee = Win/Win.

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Message 2 of 14
chiefone4u
Established Contributor

Re: Best way to help DS’s credit when buying him a car?


@SPChaser wrote:

I'm not sure how to go about this. I plan on getting my 18 year-old son a car, and I also want to help grow his credit at the same time. To build his credit, would I be able to have him as a secondary or any other suggestions? 


You can add anyone you want as a secondary on an auto loan, provided they are old enough to legally sign a contract and have a government issued photo ID. 

 

The good and the bad effect all parties regardless of whose name is primary on the loan. Your best bet is likely to have DS co-sign and reap the benefits of a lower interest rate based on your credit score. 

 

Most dealerships use the person with the highest score as primary borrower, to secure financing easier.

 

Good luck @SPChaser 

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Message 3 of 14
SPChaser
Frequent Contributor

Re: Best way to help DS’s credit when buying him a car?

Thank you! Feedback much appreciated Smiley Happy

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Message 4 of 14
ImTheDevil
Community Leader
Super Contributor

Re: Best way to help DS’s credit when buying him a car?

@SPChaser , you might also add him as an AU on one or two of your cards with low utilization and perfect history. That should give him a jumpstart to generating a score, which the loan will help to cement. You could add him and keep the card yourself - he would still benefit from your payment history. I'd lean toward giving him the card though, and if possible in the app, you could set a spend limit on it. My teenagers are AUs on a few of my cards. It should help start them in the credit portion of their lives, and I like knowing that they have funds at their disposal when needed. With your son, he may end up needing a tow or emergency gas at some point - if he's low on cash he's out of luck if you aren't nearby. Toward that end, I hid $50 in my daughter's car unbeknownst to her. If she ever is out and needs money and has forgotten her purse, she will call me and I will then tell her where to look.



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Message 5 of 14
SPChaser
Frequent Contributor

Re: Best way to help DS’s credit when buying him a car?

Thanks @ImTheDevil ! Yes, agree with all said. We've already added him as an AU on one of cards a while back, but we weren't completely sure best way to go about with adding him to csr loan. He's long since had a debit card always having access to funds. Our plan is to put him on the same track we did with DD where she is now at 21 with 747 plus CSs having started with Discover It, CFU, and recently accepting offer from Chase for CSP - so happy for her!!! She has a very conservative mindset when it comes to CRs. My DS on the other hand is a different story - he's going to take WAY more hand holding Smiley LOL

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Message 6 of 14
ImTheDevil
Community Leader
Super Contributor

Re: Best way to help DS’s credit when buying him a car?

Lol for me it's the opposite - my daughter always wants to hit Dunkin or Starbucks with friends. My son isn't nearly the spender she is. I'd say that if he has a score generated, and if he has income, have him apply or prequal, and then you co-sign if needed and you have full access to the loan account to ensure it's handled properly, and to safeguard yourself.



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Message 7 of 14
Harvey26
Valued Contributor

Re: Best way to help DS’s credit when buying him a car?

@SPChaser a couple au accounts should have generated him a score personally my mom did this and we went to our local credit union and got my car loan from there and she cosigned I had like a 690 and she was a 780+ I got a 2.75% rate on my first car I would go this route to minimize hard pulls on his report and yours. The credit union probably will even give him a small credit card to start off with. GOOD LUCK! Keep us updated

Message 8 of 14
SPChaser
Frequent Contributor

Re: Best way to help DS’s credit when buying him a car?

Lol I can truly sympathize with that - he's always wanting to eat out with friends not budgeting his cash at all. He finally got his first job, so with that happening we'll be moving forward more with having apply for at least Discover It. 

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Message 9 of 14
SPChaser
Frequent Contributor

Re: Best way to help DS’s credit when buying him a car?


@Harvey26 wrote:

@SPChaser a couple au accounts should have generated him a score personally my mom did this and we went to our local credit union and got my car loan from there and she cosigned I had like a 690 and she was a 780+ I got a 2.75% rate on my first car I would go this route to minimize hard pulls on his report and yours. The credit union probably will even give him a small credit card to start off with. GOOD LUCK! Keep us updated


Thanks @Harvey26 ! Great points! I'll keep everyone posted on developments. 

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Message 10 of 14
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