Helping A Friend Start Building...

[signaturecardmember]

Hey Guys,

I have a younger friend of mine who is trying to start building credit. She has always had cash for pretty much everything but now is starting to get the idea that credit is important. She is in her mid 20s and I believe her file is totally clean and empty except for getting a new car loan about 2 months ago that has perfect payment history. Income wont be an issue. I had her try the pre-approval sites on Captial One and Chase and the only card that came up for her was Captial One Secured.

I was thinking about having her go for

1)Capital One Journey

2)Discover IT

3)Bank Secured card with her depositing $2k or $3k and go from there, I forget which bank will let you decide how much to go?

She has a trip coming up where she has to have a CC for car rental and expenses and obv needs to start building sooner then later.

What are everyones thoughts?

Thanks in advance!

[Anonymous]

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@signaturecardmember wrote:

Hey Guys,

I have a younger friend of mine who is trying to start building credit. She has always had cash for pretty much everything but now is starting to get the idea that credit is important. She is in her mid 20s and I believe her file is totally clean and empty except for getting a new car loan about 2 months ago that has perfect payment history. Income wont be an issue. I had her try the pre-approval sites on Captial One and Chase and the only card that came up for her was Captial One Secured.

I was thinking about having her go for

1)Capital One Journey

2)Discover IT

3)Bank Secured card with her depositing $2k or $3k and go from there, I forget which bank will let you decide how much to go?

She has a trip coming up where she has to have a CC for car rental and expenses and obv needs to start building sooner then later.

What are everyones thoughts?

Thanks in advance!

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Discover likes short clean files, so definitely give them a whirl, AmEx too.

[jamesdwi]

add her to your CapOne cards as authorized user, say you  don't want a card issued, in 2-3 months time she will be getting offers and most likely be approved for an unsecured card. I have did this with a my son, and a close family friend, and it has worked. I have 2 capone cards that i use for this one is 6 years old no lates, 0 UTL, the other 5 years, 0 UTL and no negs. 

[signaturecardmember]

Thanks guys glad to know I am on the right track with Discover. My capital one card is only a year old and  dont think I want to add he to my account even if she doesnt have a card to use.

which banks offer secured cards to people  matching the deposit amount? I have seen several people with $5k limits or so on secured

[newhis]

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@signaturecardmember wrote:

Thanks guys glad to know I am on the right track with Discover. My capital one card is only a year old and  dont think I want to add he to my account even if she doesnt have a card to use.

which banks offer secured cards to people  matching the deposit amount? I have seen several people with $5k limits or so on secured

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BoA. You can get up to 10K limit with same deposit at a branch. They say online the max is 4,900 but a few people get the deposit at 5k or over. Someone reported having a 5K secured Visa Signature cash back card with BoA. Good luck.

[NRB525]

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@signaturecardmember wrote:

Thanks guys glad to know I am on the right track with Discover. My capital one card is only a year old and  dont think I want to add he to my account even if she doesnt have a card to use.

which banks offer secured cards to people  matching the deposit amount? I have seen several people with $5k limits or so on secured

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Try State Department Federal CU. Their membership and the secured card both have no HP involved. Get the membership set up, deposit the funds in the savings account (minimum $250, but I think it should be able to go up to $5k) then apply for and they will issue the secured CC with no HP, not even a credit check. Limit equals the funds in the savings account.

This card has EMV, no FTF, low APR of 6.99%, basically no fees. It'll work overseas very nicely.

[PrimeRate]

I honestly don't believe a secured card is necessary in these cases. She can either garden that car loan for a few more months and then shoot for the stars. Or you could have her submit an app at her bank or CU for a standard CC. Garden that for 6 months. Then shoot for your big banks.

If she's willing to burn a few inqs and wants to roll the dice. Amex & BOA gave me CC's with nothing but a 5 month old personal loan on my credit history back in '04 and BOA recently did the same thing for my sister whom I'm helping out. 

Let us know what she decides to do. 

EDIT: Regarding Discover, I've seen many cases where they suggest applicants w/ no credit history to submit a joint application/guarantor to be approved. I'd be cautious. 

[PrimeRate]

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@PrimeRate wrote:

I honestly don't believe a secured card is necessary in these cases. She can either garden that car loan for a few more months and then shoot for the stars. Or you could have her submit an app at her bank or CU for a standard CC. Garden that for 6 months. Then shoot for your big banks.

If she's willing to burn a few inqs and wants to roll the dice. Amex & BOA gave me CC's with nothing but a 5 month old personal loan on my credit history back in '04 and BOA recently did the same thing for my sister whom I'm helping out. 

Let us know what she decides to do. 

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As a data point regarding my sister who just received the BOA Cash Rewards card(SL: 2k). She applied in branch, has only a checking account with BOA and has NO prior credit history. The branch associate we worked with called in the application. It was approved in under a 20 minute phone call.