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Helping a family getting started on their credit journey as an Authorized User, seeking advice

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Anonymous
Not applicable

Helping a family getting started on their credit journey as an Authorized User, seeking advice

Hi,

 

I am working on helping my younger brother (21) get started on a good foot with credit. Our parents always discouraged from credit cards instead of teaching us how to properly manage them.

 

I have had the best luck with Capital One lately so I told my brother to go with a secured Cap1 Platinum card. He made his deposit and I did this because of the credit step program. I have benefited from it and I figured he will too.

 

In addition to this I added him as an authorized user on one of my most aged accounts (he does not get actual access to the card). Caveat though is it only has a 900 limit, started as secured with WF in Oct 2014 graduated Jan 2020. SL 700 SP CLI of 200 = 900.

 

I wanted to know:

 

1. If making him an authorized user is better using a card with a long history or a card with higher limit?

2. And of the following list, which would be a better one to select from to add him as an Authorized User in regards to ease and credit reporting benefits for him:

 

Cap One Venture One - 6000, open since March 2019

Cap One QS - 3500, open since Sep 2019

Citi DC - 8400, open since Dec 2019

WF Platinum - 900, open since Oct 2014

 

P.S. If Cap1 Secured was not a good choice, any suggestions for secured cards and their graduation experience?

Message 1 of 13
12 REPLIES 12
AllZero
Mega Contributor

Re: Helping a family getting started on their credit journey as an Authorized User, seeking advice

Oldest account is preferred.

Who does he bank with?

BoA secured card is great. They offer $99 deposit with $500 credit line if eligible. They can graduate early. Also, offer soft pull credit limit increases when eligible.

Capital One secured will not graduate.
Message 2 of 13
gingerflower
Valued Contributor

Re: Helping a family getting started on their credit journey as an Authorized User, seeking advice

I agree with AllZero . I started of with Boa $99 secured card and if eligible you get $500 CL plus after you graduate you get your $99 return to you. This was like 12 years ago. Now I have Alaska air, Cash rewards and a Boa business Advantage  Cc. Good luck to your brother!

Message 3 of 13
Anonymous
Not applicable

Re: Helping a family getting started on their credit journey as an Authorized User, seeking advice

Agreed also on using the oldest card BUT with the caveats that it has no adverse history such as over-limit history or missed payments, and that it is zero or very low utilization. All of those are important.

Message 4 of 13
Anonymous
Not applicable

Re: Helping a family getting started on their credit journey as an Authorized User, seeking advice


@AllZero wrote:
Oldest account is preferred.

Who does he bank with?

BoA secured card is great. They offer $99 deposit with $500 credit line if eligible. They can graduate early. Also, offer soft pull credit limit increases when eligible.

Capital One secured will not graduate.

He banks with Chase and they did not have secured so they HP for a Chase Freedom and he was declined so I thought Cap 1 would work. At this point should he go ahead and add the BOA secured to his portfolio?

Message 5 of 13
Anonymous
Not applicable

Re: Helping a family getting started on their credit journey as an Authorized User, seeking advice


@gingerflower wrote:

I agree with AllZero . I started of with Boa $99 secured card and if eligible you get $500 CL plus after you graduate you get your $99 return to you. This was like 12 years ago. Now I have Alaska air, Cash rewards and a Boa business Advantage  Cc. Good luck to your brother!


The return of the secured deposit is important. When I went with Wells Fargo in 2014 with their secured line they did not upgrade me until Jan 2020 and then it took another 60days to get my deposit returned. I'll go ahead and get him set up with BOA here soon. I'm sure we can still accomplish this on their website.

Message 6 of 13
Anonymous
Not applicable

Re: Helping a family getting started on their credit journey as an Authorized User, seeking advice


@Anonymous wrote:

Agreed also on using the oldest card BUT with the caveats that it has no adverse history such as over-limit history or missed payments, and that it is zero or very low utilization. All of those are important.


Absolutely agreed, I haven't missed payments on the account but there was an over limit use 3 years ago I am hoping that does not have too much of an impact. With everything considered, getting him started with the BOA secured will be a priority.

Message 7 of 13
AllZero
Mega Contributor

Re: Helping a family getting started on their credit journey as an Authorized User, seeking advice


@Anonymous wrote:

@AllZero wrote:
Oldest account is preferred.

Who does he bank with?

BoA secured card is great. They offer $99 deposit with $500 credit line if eligible. They can graduate early. Also, offer soft pull credit limit increases when eligible.

Capital One secured will not graduate.

He banks with Chase and they did not have secured so they HP for a Chase Freedom and he was declined so I thought Cap 1 would work. At this point should he go ahead and add the BOA secured to his portfolio?


@Anonymous   Yes, BoA secured card is great. I would recommend DB goes in branch if possible. Open up a checking or savings account and apply for the secured card.

 

It should be an Experian 8 hard pull depending on the region. An alternate bureau would be TransUnion 8.

 

Typically, csr will advise that it will take about 1 year to unsecure. Depending on credit profile, income, etc, he may be able to graduate to unsecure as early as 5 months.

Message 8 of 13
AllZero
Mega Contributor

Re: Helping a family getting started on their credit journey as an Authorized User, seeking advice


@Anonymous wrote:

@gingerflower wrote:

I agree with AllZero . I started of with Boa $99 secured card and if eligible you get $500 CL plus after you graduate you get your $99 return to you. This was like 12 years ago. Now I have Alaska air, Cash rewards and a Boa business Advantage  Cc. Good luck to your brother!


The return of the secured deposit is important. When I went with Wells Fargo in 2014 with their secured line they did not upgrade me until Jan 2020 and then it took another 60days to get my deposit returned. I'll go ahead and get him set up with BOA here soon. I'm sure we can still accomplish this on their website.


As you have experienced, Wells Fargo secured card can take a very long time to graduate. That's why I don't recommend that card. There's better secured or starter cards out there.

Message 9 of 13
Anonymous
Not applicable

Re: Helping a family getting started on their credit journey as an Authorized User, seeking advice

I added my friend as an AU on a card I don't use that is about 6 years old and it raised his insta-score about 90 points from 560 ish... I'll try to add a 2nd card now too.

Message 10 of 13
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