Best way to build my son's credit.

[Duke_Nukem]

Definitely add DS as an AU on your CapOne card, that goes a long way in helping someone with little or no credit.

I also recommend going a step further and apply for a Discover Chrome Student or IT Student version now.  They seem to love new accounts such as this.  Last year, my 18yo applied for her 1st card with Disco as a student with a $6,000 income and was approved.  She didn't have a credit report on record, but she was already an AU on our cards for several months prior to applying.

Good luck!

[Anonymous]

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@Anonymous wrote:

... I want to get my son on the right path and not make the same mistakes i did.  He is 18.  What is the best way to get him going?  

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Don't do it for him. Get him doing the heavy lifting in building good credit. 

Isn't it true people tend to value more the things they have worked for? 

[Anonymous]

@Anonymous OK, if you add him to the cap1, he WILL instantly have a score cuz its older than 6 months and cap1 backdates.

Get him a card at Navy and Discover and the SSL at Navy. Do the AU first, let points hit, then the SSL, then when points from the SSL paydown hit, do the 2 cards. The sooner he starts building positive payment history the better.

As time progresses and after a full 12 months, his scores will jump. Grab 2-3 more no AF keeper cards, maybe another Navy , an AmEx and whatever else will fit his spend.

Then, have him sit on his hands and let it age. Scores will continue to rise as long as he keeps utilization low (ag<9%, ind<29%) and doesn't miss a payment.

Do not apply for additional credit or HPs. Just let it age, unless he needs something (car, etc...).

[AllZero]

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@Anonymous wrote:

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@Anonymous wrote:

... I want to get my son on the right path and not make the same mistakes i did.  He is 18.  What is the best way to get him going?  

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Don't do it for him. Get him doing the heavy lifting in building good credit. 

Isn't it true people tend to value more the things they have worked for? 

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Wisely stated.

@Anonymous 

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

... I want to get my son on the right path and not make the same mistakes i did.  He is 18.  What is the best way to get him going?  

---

Don't do it for him. Get him doing the heavy lifting in building good credit. 

Isn't it true people tend to value more the things they have worked for? 

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That is true!!! He has seen my struggles with credit and is learning what not to do. lol

[Anonymous]

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@Anonymous wrote:

@Anonymous OK, if you add him to the cap1, he WILL instantly have a score cuz its older than 6 months and cap1 backdates.

Get him a card at Navy and Discover and the SSL at Navy. Do the AU first, let points hit, then the SSL, then when points from the SSL paydown hit, do the 2 cards. The sooner he starts building positive payment history the better.

As time progresses and after a full 12 months, his scores will jump. Grab 2-3 more no AF keeper cards, maybe another Navy , an AmEx and whatever else will fit his spend.

Then, have him sit on his hands and let it age. Scores will continue to rise as long as he keeps utilization low (ag<9%, ind<29%) and doesn't miss a payment.

Do not apply for additional credit or HPs. Just let it age, unless he needs something (car, etc...).

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Sounds like a plan! 

[credit8502020]

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@AllZero wrote:

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@Anonymous wrote:

Can you elaborate more on the SSL? He has about $1,000 saved in a shoe box in his closet. lol

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Have a quick read on CGID post   Adding an installment loan -- the Share Secure technique #1 through 3. It will give the fundamentals on a SSL.

For a 5 year SSL account will require minimum $3,001. Note, one can pay in advance and get the secured funds returned back into the savings account. Thus freeing up funds. One needs to pay down to 8.9% utilization.

Example:

Secured amount to use $3,001

Pay $2,734 to the SSL account and get back same amount returned into the savings account.

$267 is locked and secured in the SSL account and is used to make small monthly payments for the entire 5 years.

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Hi @AllZero I haven't used the SSL technique because I already have installment loans. However, I want to make sure I'm understanding this correctly. Using your example above, they can totally remove the $2734 dollars after they've paid the SSL down without any penalty? I know someone who is buying a home and may need access to those funds so I just wanted to make sure. Also, if someone is doing this for a 6 months and maybe doesn't have $3,001, but $500, does the same technique work? Pay down $455.50 and then pay off the remaining $44.50 for the next 6 months? Thank you! 

[AllZero]

@credit8502020. If obtaining the 6 month SSL, person will have time their SSL in line with auto loan before SSL term is complete, to maximize the scoring benefit. (referring to your other post). Once SSL has completed and is closed, whatever score benefit obtained for a paid down loan will be lost if no other open installment loan is present.

Yes, the same technique applies either 6 months or 60 months.

Regardless of the SSL amount opened, whatever the amount paid back into the SSL will be released back into the person's account.

[credit8502020]

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@AllZero wrote:

@credit8502020. If obtaining the 6 month SSL, person will have time their SSL in line with auto loan before SSL term is complete, to maximize the scoring benefit. (referring to your other post). Once SSL has completed and is closed, whatever score benefit obtained for a paid down loan will be lost if no other open installment loan is present.

Yes, the same technique applies either 6 months or 60 months.

Regardless of the SSL amount opened, whatever the amount paid back into the SSL will be released back into the person's account.

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@AllZero  Ok. So the biggest scoring benefit is seen at the point that it is paid down to the 8.9% or at the end? Let's assume that they need to buy a car in December, but start this loan now and pay it down to 8.9% by October. Although it won't be completed until March, would they still get a strong gain in October? 

[AllZero]

@credit8502020. Yes, once SSL has been paid down to 8.9% utilization and reporting to the 3 bureaus, person will see the score gain.

That is the reindeer game of paying in advance without shortening the loan term. Self does not do that.

Check out post 6 in this thread.