Angie in VA Posted December 23, 2018 Share Posted December 23, 2018 This person makes ~$15k/year. Great saver. Never had student loans or a car loan, hence the need to establish credit, which obviously takes time. So, how to do it? Credit card? If so, which one is best for that? Will he need to pay for the card to start out? Take out a loan and then pay it back immediately? Should parents co-sign such a loan? (Don't worry. Parents would only do so w/ a trust-worthy child, which is the case.) All of the above? All advice welcome. This grad student will likely continue post-grad studies, so no permanent job is in the near future. Quote Link to comment Share on other sites More sharing options...
regentrude Posted December 23, 2018 Share Posted December 23, 2018 1. Become authorized user on parent credit card. No cost, builds credit. Can be done at age 16. 2. Apply for own credit card. Choose one that has no fee. He should be eligible for student card if he has own income. 3. Pay off student loans. That goes into the credit score as well. 4 1 Quote Link to comment Share on other sites More sharing options...
vmsurbat1 Posted December 23, 2018 Share Posted December 23, 2018 Two options that worked for our family's young adults: 1. Many CC providers have a student-specific CC, usually with a low credit amount with the aim of getting and keeping a new customer. 2. Our CU (as do many others) offers a secured CC--this is where the new CC user first puts in, say $500, and that becomes their credit limit. After 6 months or so of responsible use, the CC limit goes up a bit and the $500 no longer needs to be held since the user has proved their credit worthiness. Really, CC companies WANT people to use their CC--we didn't find it difficult at all to get our young people established with one. (We did give them the good advice to treat the CC as a debit card --only spending what they could actually afford -- and using the CC for convenience, security, and, for some, the rewards (ie. 1.5% back....)). HTH! 1 Quote Link to comment Share on other sites More sharing options...
Angie in VA Posted December 23, 2018 Author Share Posted December 23, 2018 53 minutes ago, regentrude said: 1. Become authorized user on parent credit card. No cost, builds credit. Can be done at age 16. 2. Apply for own credit card. Choose one that has no fee. He should be eligible for student card if he has own income. 3. Pay off student loans. That goes into the credit score as well. These are great ideas. Thank you so much! This student had no loans. Got lots of scholarships. Got undergrad degree w/o going into debt, ditto for current grad degree. Two cars bought w/o loans too. 2 Quote Link to comment Share on other sites More sharing options...
Angie in VA Posted December 23, 2018 Author Share Posted December 23, 2018 48 minutes ago, vmsurbat1 said: Two options that worked for our family's young adults: 1. Many CC providers have a student-specific CC, usually with a low credit amount with the aim of getting and keeping a new customer. 2. Our CU (as do many others) offers a secured CC--this is where the new CC user first puts in, say $500, and that becomes their credit limit. After 6 months or so of responsible use, the CC limit goes up a bit and the $500 no longer needs to be held since the user has proved their credit worthiness. Really, CC companies WANT people to use their CC--we didn't find it difficult at all to get our young people established with one. (We did give them the good advice to treat the CC as a debit card --only spending what they could actually afford -- and using the CC for convenience, security, and, for some, the rewards (ie. 1.5% back....)). HTH! Thank you so much! Such good ideas. I knew I could count on The Hive! Quote Link to comment Share on other sites More sharing options...
hippiemamato3 Posted December 23, 2018 Share Posted December 23, 2018 Yes - becoming an authorized user on a parent's card can built good credit fairly quickly. Also, secured cards are a decent option. 1 Quote Link to comment Share on other sites More sharing options...
gardenmom5 Posted December 23, 2018 Share Posted December 23, 2018 we've started our kids on a visa/MC, whichever has the lowest interest, and no upfront fee. generally the kid should be getting solicitations in the mail. most major CC companies will give a card to someone even without a "credit rating"- it will have a very low limit. 1 1 Quote Link to comment Share on other sites More sharing options...
KathyBC Posted December 24, 2018 Share Posted December 24, 2018 This is so far only theoretical and may only apply where we live, but was told that buying a phone through a provider on a plan would count, as well as paying for car insurance on monthly payment plan (fairly minimal interest). 1 Quote Link to comment Share on other sites More sharing options...
Frances Posted December 24, 2018 Share Posted December 24, 2018 (edited) If he’s been paying for his own car insurance, he should get new quotes after he’s established credit. He may be paying more than necessary now due to a lower credit score. Edited March 8, 2019 by Frances 1 1 Quote Link to comment Share on other sites More sharing options...
Katy Posted December 24, 2018 Share Posted December 24, 2018 When I first got married I didn't have debt except for student loans, so we found even with good income and savings we couldn't get a mortgage. In addition to what everyone else said we were told we needed a variety of credit sources for the best score. IME a credit union will offer very low cost secured installment loans that you can start with, then will offer a car loan (take one and make payments for at least a year before you pay it off, then you can qualify for a mortgage in less than two years. 1 1 Quote Link to comment Share on other sites More sharing options...
Angie in VA Posted December 24, 2018 Author Share Posted December 24, 2018 Thank you all for the advice! Quote Link to comment Share on other sites More sharing options...
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