Building Credit History for Child

[pizzadude]

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@Anonymous wrote:

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@pizzadude wrote:

@Anonymous you have an AMEX ??  My advice would be to make her an additional cardmember on an AMEX charge card ~ you can do this for children @ 15 yrs old.    Whether you give it to her to use or not is your call of course, but it will establish her member since date with AMEX, and any new cards that she opens with them in the future will backdate to the year. 

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Is this confirmed? I was under the impression that Amex only backdates to your first solo account...

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Yes, when you become an additional cardmember it establishes your member since date with AMEX, so any new accounts should backdate to that date.  

[Videoguy]

My son is student, 21 years old. He is still on college. Recently, we help him to buy older car. We could pay it in cash, however I insisted on half down and half car loan to start build him a credit history. We were able to secure him a car loan for little over $5,000 without co-singing. It is on his name only and his first credit on file.

How long we should pay the monthly payments for him to establish credit with the CRA’s?  Dealer is recommending at least 1 year, before paying off the loan. Do you really need 12 monthly payments to start build credit, or is the dealer playing for the financing company?

[pizzadude]

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@Videoguy wrote:

My son is student, 21 years old. He is still on college. Recently, we help him to buy older car. We could pay it in cash, however I insisted on half down and half car loan to start build him a credit history. We were able to secure him a car loan for little over $5,000 without co-singing. It is on his name only and his first credit on file.

How long we should pay the monthly payments for him to establish credit with the CRA’s?  Dealer is recommending at least 1 year, before paying off the loan. Do you really need 12 monthly payments to start build credit, or is the dealer playing for the financing company?

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I'd do at least 6 payments before paying it off, perhaps more depending the interest rate....What are the terms of the loan ?

[Videoguy]

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@pizzadude wrote:

I'd do at least 6 payments before paying it off, perhaps more depending the interest rate....What are the terms of the loan ?

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Well, not too good:

Simple Interest loan of $5,691.50 for 24 monts with interest of 21.58%. (Interest cost is $3.35581 DAILY). 

That is the reason....

[pizzadude]

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@Videoguy wrote:

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Well, not too good:

Simple Interest loan of $5,691.50 for 24 monts with interest of 21.58%. (Interest cost is $3.35581 DAILY). 

That is the reason....

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Ouch... Well thankfully it is only a 2 year loan so that makes the interest rate less of a pain point....although it is still bad.    Have you confirmed that the loan is reporting to all three CRAs ?   Hopefully it is.     I would give it 6 payments and then just PIF.    IMO there's no reason to let it go longer unless you just want to pay another ~$500 in interest..