24 Year Old No Credit

[KurtCobain23]

Hi, I am a 24 Year old that still lives at home with No Credit whatsoever. My Dad has offered to add me this November as an authorized user on His Capitol One card that he has had since 2004. His Capital one card has $9,500 limit with a $1,300 balance.  What should my next step be? I have $1200 saved in the bank to use for credit building. Do I still have to go the Secured credit card route? or do u think that being an AU on my Fathers Capital One history could get me approved for a Chase card? Should I apply for 2 or 3 secured credit cards at the same time?  Should I get an online Credit building Loan, and if so who with?    I guess what I am trying to ask is if you guys where in my position, What exact steps would you take to build your credit up fast but also responsibly?

Any Help would be greatly appriciated!

[Anonymous]

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@KurtCobain23 wrote:

Hi, I am a 24 Year old that still lives at home with No Credit whatsoever. My Dad has offered to add me this November as an authorized user on His Capitol One card that he has had since 2004. His Capital one card has $9,500 limit with a $1,300 balance.  What should my next step be? I have $1200 saved in the bank to use for credit building. Do I still have to go the Secured credit card route? or do u think that being an AU on my Fathers Capital One history could get me approved for a Chase card? Should I apply for 2 or 3 secured credit cards at the same time?  Should I get an online Credit building Loan, and if so who with?    I guess what I am trying to ask is if you guys where in my position, What exact steps would you take to build your credit up fast but also responsibly?

Any Help would be greatly appriciated!

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Ask the bank where you have your savings if it is possible to get an unsecured credit card.  Another option would be to join a local credit union and obtain a credit card from them.  

Why exactly do you want a Chase card?  It is unlikely that Chase will approve any of their cards unless you have at least one year of your own credit history (not an AU).

For me, being added as an AU would be a last resort.  You have no control over what occurs with the card and it could negatively affect your credit.

Although unlikely, you should also check to see if you're pre-approved at either of these two sites.  While you say you have no credit, its possible that you already have a credit file from which a credit score can be generated.

Discover:  https://www.discovercard.com/application/prequal

American Express:  https://www.americanexpress.com/us/credit-cards/check-for-offers/

[Anonymous]

I'm 30. I lived off cash and debit until I was denied financing for a furniture purchase for not having credit.

I started last year with a Discover IT Chrome card with a modest deposit of $400. After 6 months FICO will generate a score(if you don't have one like Maize and Blue suggested.) With responsible use and on-time payments, the card can graduate to unssecured credit in 8 months.

I went with a small-ish limit on my card so I knew I couldn't over spend. YMMV.

[Shooting-For-800]

I would check prequal for Merrick, Capital One, and Discover.

I am not big fan of secured cards or predatory cards like Credit One.

If you have to do a secured card, I would suggest a credit union like PenFed or a bank like Capital One.

Perhaps a self loan also.  

Maybe try a good store card like Amazon or Walmart - something you will actually use and pay.

I would NOT start applying for everything.

Try to apply for maybe 5 cards total that pull different CRs plus Cap One.

Cap One pulls all three but they are fantastic for helping bad/no credit clients.

No matter the results, I would not apply for anything else for 6 months.

Then maybe apply for 3 cards then wait for 6 months and apply for 3 cards.

Rinse and repeat.

You only need 3-5 cards and an installment loan to really start building credit properly.

GL!

[Thomas_Thumb]

A secured card is not a bad option starting out. However, I'd suggest first talking with someone at the bank where you have existing savings/checking accounts about qualifications for an unsecured credit card. My then 21 year old daughter applied for a Visa card at WF (where she has savings/checking) and Discover without having a Fico score. She was approved for both cards.

Discover will check L2C score for applicants not having a Fico score. The L2C score looks at rental and utility payment history and the score is used as part of the approval process. If the OP has been a renter with utility bills and a reliable payment history, chances are good that Discover will approval if income is at least $10k per year.

If not, go the secured card route and consider applying for an unsecured card 6 months down the road after your profile generates a Fico score.

P.S. Being an AU on your dad's card is likely to be beneficial as long as card UT is kept below 29%. However, our daughter was successful with her applications without any AU accounts.

[Anonymous]

I think the AU account considering its utilization would help the OP here.  I'd probably suggest him being added as an AU, doing his credit apps, then dropping the AU account 6 months later after the approvals and accounts show up on his CR and he's got 6 months of credit history with his own accounts.

If you're a member of a bank or CU I would inquire about an unsecured starter card through them and see what they say.  If not, go with a secured card through them.

For secured cards from other lenders, I'd suggest Discover and Capital One.  I'd get both if I were you, just to get a few accounts aging together to start your credit file.  In 6+ months you can go ahead an unsecure them and then start growing those accounts.  In 2 years you can have a 750-800 score with your own 3 accounts (no AU account) so that's what I'd set as a goal if I were you.  Never miss a payment and keep your utilization low; you'll get there no problem.

[AndySoCal]

I agree with much that has been siad. I would start with the secured credit cards and use them and pay them off each month. Then in 8 months to a year try for a store like Walmart or Amazon.  I suggest the time frames so you have time to build a payment history. If you apply for credit cards too soon the lack of a payment history may not help you. Building your credit takes time you do not need to do it all at once. I started by getting a store card then I got another one. Eventually I got a Visa and a Mastercard.

[Anonymous]

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@Anonymous wrote:

I think the AU account considering its utilization would help the OP here.  I'd probably suggest him being added as an AU, doing his credit apps, then dropping the AU account 6 months later after the approvals and accounts show up on his CR and he's got 6 months of credit history with his own accounts.

If you're a member of a bank or CU I would inquire about an unsecured starter card through them and see what they say.  If not, go with a secured card through them.

For secured cards from other lenders, I'd suggest Discover and Capital One.  I'd get both if I were you, just to get a few accounts aging together to start your credit file.  In 6+ months you can go ahead an unsecure them and then start growing those accounts.  In 2 years you can have a 750-800 score with your own 3 accounts (no AU account) so that's what I'd set as a goal if I were you.  Never miss a payment and keep your utilization low; you'll get there no problem.

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Nice response here by BBS.  I agree with him that the AU strategy is worth giving a shot -- and that our OP should view it as a ladder that he throws away once he has gotten his first few cards.

If he wants to give it a try, let us know and we can walk him through all the steps that are needed to do it right.

[Anonymous]

If you decide to get a secured credit card. I recommend discover. They are a cash back rewards card and they double (match) your cash back for the first year. They also begin consideration for unsecuring at the 7th month. ☺

[Anonymous]

I always paid cash for years, 30+

Couple years ago cold apped chase fu and approved

Now I can't believe I didn't get started earlier. I'd never learned about credit and my parents always discouraged me getting any

Just get started however you can