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 Post subject: Establishing credit-18 yrs old
PostPosted: Tue Dec 11, 2012 2:07 pm 

Joined: Mon Nov 26, 2012 10:18 am
Posts: 30
My son has no credit history. He turned 18 in June. He got a checking account at a local branch of a large national bank. He applied for a credit card through them and was declined, much to the surprise of the person helping him. So, now all he has on his credit is a hard inquiry, is that right? How best can he start establishing credit? I'm worried about him applying for any more credit cards.

He's starting at a vocational college next month, so I was thinking maybe take a small student loan, even though he probably won't need anything beyond his grants.

Thoughts?


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 Post subject: Re: Establishing credit-18 yrs old
PostPosted: Tue Dec 11, 2012 2:34 pm 
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Joined: Wed Sep 23, 2009 9:01 am
Posts: 5399
annibe11e wrote:
He's starting at a vocational college next month, so I was thinking maybe take a small student loan, even though he probably won't need anything beyond his grants.
Thoughts?


Once he is a student at the college he will get unsolicited preapproval offers. I suggest just taking advantage of one of those in a few months and using it wisely.


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 Post subject: Re: Establishing credit-18 yrs old
PostPosted: Tue Dec 11, 2012 3:50 pm 

Joined: Mon Nov 01, 2010 5:15 pm
Posts: 1213
DoingHomework wrote:
annibe11e wrote:
He's starting at a vocational college next month, so I was thinking maybe take a small student loan, even though he probably won't need anything beyond his grants.
Thoughts?


Once he is a student at the college he will get unsolicited preapproval offers. I suggest just taking advantage of one of those in a few months and using it wisely.

Yep. Credit card offers will fall from the sky!

You could also put him on as a authorized user on your card if you have one. He'll get at least some credit history that way.


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 Post subject: Re: Establishing credit-18 yrs old
PostPosted: Wed Dec 12, 2012 6:05 am 

Joined: Mon Feb 04, 2008 7:35 am
Posts: 1148
Location: Maryland
Do not put him as an authorized user on your account. Your credit is teetering so much right now, that you do not need him to ruin your credit or you'll really be screwed.

Why did he apply for a credit card? If he doesn't have money to buy things right now, he doesn't need it. He is 18 and about to go to school. Let him use cash and his bank account and figure out how to live without credit. Bad habits don't need to start because he's 18 and has access to a card. Give him time to mature.


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 Post subject: Re: Establishing credit-18 yrs old
PostPosted: Thu Dec 13, 2012 9:55 am 

Joined: Mon Nov 26, 2012 10:18 am
Posts: 30
Thanks guys! I didn't think about the credit card offers for college students. I'll tell him to wait for some of those to come in and then compare them.

Peachy, the credit card is for establishing a credit history.


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 Post subject: Re: Establishing credit-18 yrs old
PostPosted: Thu Dec 13, 2012 3:07 pm 

Joined: Mon Feb 04, 2008 7:35 am
Posts: 1148
Location: Maryland
I understand that you want him to start getting a credit history, but does he really need it right now?

When I went to college, my parents told me to sign up for a Sears card. I think they took me to Sears once and I bought something and paid off the bill. I don't know that I used that card for anything else, until I closed it some 5 or 6 years later.

I'm getting to be an old girl, but does he need to get an apartment? Is he trying to finance a car? I don't think people who rent apts. to college students look at credit history, but I could be wrong. I know I didn't have to have a credit history when I rented an apt with friends my senior year. Why do 18 year olds need a credit history? I guess that's what I'm trying to figure out.


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 Post subject: Re: Establishing credit-18 yrs old
PostPosted: Thu Dec 13, 2012 4:28 pm 
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peachy wrote:
I don't think people who rent apts. to college students look at credit history, but I could be wrong.


Some do, perhaps most.


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 Post subject: Re: Establishing credit-18 yrs old
PostPosted: Thu Dec 13, 2012 10:18 pm 

Joined: Tue Jun 30, 2009 9:44 pm
Posts: 320
Location: Atlanta, Georgia
DoingHomework wrote:
peachy wrote:
I don't think people who rent apts. to college students look at credit history, but I could be wrong.

Some do, perhaps most.

My experience with renting in big apartment complexes while in college ('99-04) was that management did run our credit and also required a parent to co-sign the leases. I had good credit, but the co-signing rule was typical near our college if all tenants were under age 25, I believe. Thus, student credit didn't matter so much because a parent was also on the hook.


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 Post subject: Re: Establishing credit-18 yrs old
PostPosted: Fri Dec 14, 2012 5:38 am 

Joined: Mon Feb 04, 2008 7:35 am
Posts: 1148
Location: Maryland
@LeRaindrop,
Having parents cosign is the smart thing to do, and that is why I was asking others who may have more recent experience than me. How did you get good credit when you were growing up?


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 Post subject: Re: Establishing credit-18 yrs old
PostPosted: Fri Dec 14, 2012 12:34 pm 

Joined: Tue Jun 30, 2009 9:44 pm
Posts: 320
Location: Atlanta, Georgia
peachy wrote:
@LeRaindrop,
Having parents cosign is the smart thing to do, and that is why I was asking others who may have more recent experience than me. How did you get good credit when you were growing up?

Peachy, around when I was 14 or 15, my dad and I applied for a credit card together, or possibly I was considered an authorized user on an account in his name -- I'm not sure which is the case, but I know I had my own plastic Visa card with my name on it. In any event, we both used the card a little bit each each month, and when the bill came, I wrote my dad a check for my portion so that he could make payment in full. My amounts were typically pretty low, like maybe $40 a month. I did a TON of baby-sittying in middle and high school :)


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