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Best way to build my son's credit.

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Anonymous
Not applicable

Best way to build my son's credit.

Hello all! 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?  Should i add him as AU on my credit cards? I bank with Navy, i was thinking having him only a bank acocunt & have him apply for a credit card. We applied for cap one platinum and he got denied. He only has that one inquiry, and no fico score.  Thanks in advance.

Message 1 of 23
22 REPLIES 22
AllZero
Mega Contributor

Re: Best way to build my son's credit.


@Anonymous wrote:

Hello all! 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?  Should i add him as AU on my credit cards? I bank with Navy, i was thinking having him only a bank acocunt & have him apply for a credit card. We applied for cap one platinum and he got denied. He only has that one inquiry, and no fico score.  Thanks in advance.


I think DS has 3 inquiries now. 1 each per bureau. Capital One triple whipple.

 

Yes, your son would benefit from AU cards as long as it has a lengthy credit age, zero delinquency and low utilization. Wait 6 months until he has a FICO score.

 

Navy offers secured nRewards card if he can not obtain the unsecured card.

Message 2 of 23
Anonymous
Not applicable

Re: Best way to build my son's credit.


@AllZero wrote:

@Anonymous wrote:

Hello all! 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?  Should i add him as AU on my credit cards? I bank with Navy, i was thinking having him only a bank acocunt & have him apply for a credit card. We applied for cap one platinum and he got denied. He only has that one inquiry, and no fico score.  Thanks in advance.


I think DS has 3 inquiries now. 1 each per bureau. Capital One triple whipple.

 

Yes, your son would benefit from AU cards as long as it has a lengthy credit age, zero delinquency and low utilization. Wait 6 months until he has a FICO score.

 

Navy offers secured nRewards card if he can not obtain the unsecured card.


Hello! Yes i do think its 3 total inquiries, one per bureau, my oldest card is a cap one, no lates, and almost 2 years old.  I called Navy and they said he can open an account and then apply for a card and if not approved they can use that inquiry for a secured card. Smiley Happy  

Message 3 of 23
AllZero
Mega Contributor

Re: Best way to build my son's credit.


@Anonymous wrote:

Hello! Yes i do think its 3 total inquiries, one per bureau, my oldest card is a cap one, no lates, and almost 2 years old.  I called Navy and they said he can open an account and then apply for a card and if not approved they can use that inquiry for a secured card. Smiley Happy  


That Capital One card will suffice as AU. Since he currently has no score, it may be wise to wait until he has a score.

 

For credit building, it's recommended to have 3 open revolvers and 1 open installment loan. Navy does have a SSL by the way. It will give him the score boost he needs in addition to the AU account.

 

If your DS has no installment loans, my suggestion would be (if funds are available) to open a 5 year SSL first. Wait for it to appear on DS credit reports. Wait 6 months for scores. Apply for the 1st Navy card. Hopefully, it will be unsecured due to the history of having an SSL with Navy.

 

If he needs a card now, then go with the Navy app. It's good to know they will recon for secured. If you didn't know, they will hard pull TU9 for new credit cards.

Message 4 of 23
Anonymous
Not applicable

Re: Best way to build my son's credit.


@AllZero wrote:

@Anonymous wrote:

Hello! Yes i do think its 3 total inquiries, one per bureau, my oldest card is a cap one, no lates, and almost 2 years old.  I called Navy and they said he can open an account and then apply for a card and if not approved they can use that inquiry for a secured card. Smiley Happy  


That Capital One card will suffice as AU. Since he currently has no score, it may be wise to wait until he has a score.

 

For credit building, it's recommended to have 3 open revolvers and 1 open installment loan. Navy does have a SSL by the way. It will give him the score boost he needs in addition to the AU account.

 

If your DS has no installment loans, my suggestion would be (if funds are available) to open a 5 year SSL first. Wait for it to appear on DS credit reports. Wait 6 months for scores. Apply for the 1st Navy card. Hopefully, it will be unsecured due to the history of having an SSL with Navy.

 

If he needs a card now, then go with the Navy app. It's good to know they will recon for secured. If you didn't know, they will hard pull TU9 for new credit cards.


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

Message 5 of 23
AllZero
Mega Contributor

Re: Best way to build my son's credit.

Message 6 of 23
Anonymous
Not applicable

Re: Best way to build my son's credit.


@AllZero wrote:

I would recommend reading the below from CreditGuyInDixie
Adding an installment loan -- the Share Secure technique
The Quest for an SSL alternative to Alliant


Thank you AllZero! I will look more into it.  He doesnt need any cards but i do want to get him in the best financial position poosible for when he does need credit. Smiley Happy

Message 7 of 23
AllZero
Mega Contributor

Re: Best way to build my son's credit.


@Anonymous wrote:

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


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.

Message 8 of 23
AllZero
Mega Contributor

Re: Best way to build my son's credit.


@Anonymous wrote:

@AllZero wrote:

I would recommend reading the below from CreditGuyInDixie
Adding an installment loan -- the Share Secure technique
The Quest for an SSL alternative to Alliant


Thank you AllZero! I will look more into it.  He doesnt need any cards but i do want to get him in the best financial position poosible for when he does need credit. Smiley Happy


It will definitely help him on his credit journey.

 

If you do not have an open installment (student, personal, auto, mortgage) loan yourself, it's something to consider as well.

Message 9 of 23
AllZero
Mega Contributor

Re: Best way to build my son's credit.

@Anonymous   Good read NFCU SSL

Message 10 of 23
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