How to get a credit score?

[GunsMadeAmericaFree]

My oldest son, who is about to turn 20, evidently has no credit score, but is interested in getting one. He goes to a local college for an associate's degree in auto repair, and is most of the way through his first of 2 years.
In the afternoons, he works 5 hours at a local auto repair shop. He has worked part time at different auto repair shops for 2 years now, and still lives here at home with us. He is driving a car that I purchased, and he fixed up using his skills
and a decent amount of 'elbow grease'.

Recently, someone told him that it would be a good idea to build credit, so he tried getting a credit card that was marketed as a good first card for college students. They declined to issue one to him.
He has no debt, lives at our home, and has saved up some money - less than $10k, but pretty decent for a 19 year old. He has a credit union account and a debit card.

Can anyone recommend some small things that he could do in order to generate a positive credit score?

 

[sdifox]

Check with the credit union? They tend to offer CC as well

 

[purbeast0]

Add him as an authorized user on one of your credit cards. I honestly had no clue that being added as an authorized user affected your own personal credit until last year. I thought it just meant "here is an additional card for the account you created" and that is it.

My wife and I play the credit card game and for the first time in like 15 I actually added myself as an authorized user to her new account and then got an email about my credit changing a month later.

 

[Lost_in_the_HTTP]

Ask the CU about a card, maybe even a secured card using the savings account as collateral. Preferably one that would graduate to unsecured after a year or less.

 

[GunsMadeAmericaFree]

Ask the CU about a card, maybe even a secured card using the savings account as collateral. Preferably one that would graduate to unsecured after a year or less.

Great idea! Since he already has a savings account and debit card there, and he's an adult, he should just be able to go in and get a credit card from the credit union easily and quickly. If he just uses it to pay for gas and other small items, then pays the bill each month, that should help him build up a credit history. Thanks!

 

[Torn Mind]

There's usually at least some company that offers a no fee card that also has no perks like cash back. Those are the credit cards that a beginner can be approved for. If you can't get that, then you're stuck paying up for a secured credit card, but try to avoid that. The Capital One Platinum card is one such card.

Then he just gotta pay things on time.

You could add him as an authorized user to your card but then don't give him the number or access to it. He can piggyback off your score.

 

[NutBucket]

Back when I was that age, I seem to recall my first credit card was a "secured" card that I required I deposit $200. I don't recall how long I used that but couldn't have been more than a year before I got a "real" credit card.

I've also read that more recently paying rent on time will contribute to your credit score. Obviously doesn't help your son but certainly makes sense.

 

[Genx87]

My oldest son, who is about to turn 20, evidently has no credit score, but is interested in getting one. He goes to a local college for an associate's degree in auto repair, and is most of the way through his first of 2 years.
In the afternoons, he works 5 hours at a local auto repair shop. He has worked part time at different auto repair shops for 2 years now, and still lives here at home with us. He is driving a car that I purchased, and he fixed up using his skills
and a decent amount of 'elbow grease'.

Recently, someone told him that it would be a good idea to build credit, so he tried getting a credit card that was marketed as a good first card for college students. They declined to issue one to him.
He has no debt, lives at our home, and has saved up some money - less than $10k, but pretty decent for a 19 year old. He has a credit union account and a debit card.

Can anyone recommend some small things that he could do in order to generate a positive credit score?

What card? There are a bunch of starter cards for young adults that has a low limit but high interest rate to build credit.

 

[Lost_in_the_HTTP]

Most starter cards should be avoided. Many are just outright predatory.

With an established relationship with a local CU, that should be the first place to start.

He should also open a new account at a local bank and begin working within that system as records and histories are different for establishing future reputation.

One more thing to try is a small loan, maybe $500 or so. He doesn't even have to use the money. Put it in checking or savings and set automatic payments to pay the loan off at least a month early.

There will be some application fees and an interest rate, but credit reporting agencies want to see more than one type of credit on files.

 

[JM Aggie08]

Not sure if he can get approved for it, but AMEX blue or something similar -- this way, he can't carry a balance.

Source: was a dumb 20 year old that had Discover/Wells Fargo CCs in college..dumb things were done.

 

[GunsMadeAmericaFree]

Not sure if he can get approved for it, but AMEX blue or something similar -- this way, he can't carry a balance.

Source: was a dumb 20 year old that had Discover/Wells Fargo CCs in college..dumb things were done.

I can relate on the Discover card, which I got when in college, and didn't have a job yet. Somehow I managed to convince myself that I NEEDED to upgrade my old 386sx-16 based machine to a 486 machine. I put about $600 on that card doing so, and it took me ages to get it paid off. I never should have had a card without at least a part time job.

 

[BoomerD]

Ask the CU about a card, maybe even a secured card using the savings account as collateral. Preferably one that would graduate to unsecured after a year or less.

Secured card would be the easiest way.

 

[MtnMan]

Grandsons 20 and 22 both have established credit, both have auto loans in their name, the oldest has been pre-approved for a mortgage (he's looking for land to build on). They started out with credit cards from a CU at probably 18.

 

[Red Squirrel]

I check Credit Karma once in a while for fun, it's free.

Best way to get a credit score when young is to get a credit card and use it for everything and pay it off every month. That's how I built up my credit. Got one at 18 so I could pay for web hosting. Before I turned 18 I used to borrow my mom's credit card and pay her back and she really got annoyed at that lol.

 

[dank69]

The first thing you should do when you turn 18 is get a credit card and learn how to use it properly. Day one. Then, never ever ever close that CC account even when you don't use it anymore. Use it like once a year to make sure it doesn't get auto canceled.

 

[turtile]

Any bank or credit union in that he creates an account will be ideal. Even if he doesn't pay the card, they can still earn from the money he deposits. And since he works, he might be able to get approved for a good credit card if he sets up direct deposit. That way it assures the bank that he has an income stream for the card.

It's also worth opening an account with a new bank or credit union if he can get a better cash-back card. My first card at 18 gave me 2% in some categories and 1% in everything else. That adds up to a lot even when you are a college student. It's also ideal to have at least four different credit cards. Once he gets the first card, apply for another after a year.

The cards alone will get him a credit score in the upper 700s but if he wants to solidly break 800, he will need to have a mix of credit.

 

[akugami]

PLEASE TELL HIM TO BE RESPONSIBLE IN CREDIT CARD USAGE. PAY IT OFF MONTHLY!!!

A secured credit card is an option. Basically requires a deposit, and your deposit amount is your balance limit. This is a good starter way to build up credit, and probably should have been done when he was 18.

As others have noted, get him signed up as an authorized user of your credit card account. Adding a child (or other family member) who needs credit is a great way to build up credit. That person basically piggy backs off your credit history.

Your son seems like the responsible type, but I'd still keep the actual card with you, and not on him, since any charges made to it are your responsibility.

What should be done, once his credit improves, is to have him get a different card under his own name.

Keep in mind that you should not immediately remove him from your credit card account after he has been approved for a card. Part of the credit history involves the age of the accounts. Removing him as an authorized user under your account effectively removes your credit history from his name. It also affects his credit utilization (how much of your available credit you have used). Both of these will lower his credit score.

He's still young, so a couple years won't make a huge difference, but he in today's society, it would have been better if he got a credit card already at age 18 to start building up credit. Whatever card he gets as a first card, try to never get that account cancelled, because age of account is part of your credit score.

If he plans on making a huge purchase later (car, house, etc.), him piggy backing off your credit history can help him get approved, or get lower interest. Once he safely has something like a mortgage, and you feel his credit history is established, it would then be safe to remove him as an authorized user.

 

[NutBucket]

What's a mortgage? Everyone here pays cash for property...

 

[GunsMadeAmericaFree]

What's a mortgage? Everyone here pays cash for property...

It means "death pledge", in other words, you or your family will pay it off, even in event of your death, or the bank takes back ownership of it.

 

[WilliamM2]

It means "death pledge", in other words, you or your family will pay it off, even in event of your death, or the bank takes back ownership of it.

Your estate will pay back ANY outstanding loans if there is money to pay it.

What is this "death pledge" bullshit you speak of? BTW, if the bank takes a home for non payment, dead or alive, it will sell the property, and you, or you estate will get any money above what was owed on it.

 

[manly]

Have banks gotten a lot more risk averse after the financial crisis? Student-oriented credit cards used to be marketed heavily and given out like candy to freshman. Card issuers knew these potential customers had little or no income, but could become captive customers for life. You didn't even need a secured card, because it's not like college kids have bad credit. They have no credit (history). It's unclear why OP's son was declined for his first CC. As others mentioned, a secured card is an easy solution.

I was ~ 16 yo in high school when MBNA issued my first student CC. Unfortunately, BofA canceled that card during the mortgage crisis because I never used it and all banks were desperately trying to draw down their credit risk at the time.

 

[sdifox]

Have banks gotten a lot more risk averse after the financial crisis? Student-oriented credit cards used to be marketed heavily and given out like candy to freshman. Card issuers knew these potential customers had little or no income, but could become captive customers for life. You didn't even need a secured card, because it's not like college kids have bad credit. They have no credit (history). It's unclear why OP's son was declined for his first CC. As others mentioned, a secured card is an easy solution.

I was ~ 16 yo in high school when MBNA issued my first student CC. Unfortunately, BofA canceled that card during the mortgage crisis because I never used it and all banks were desperately trying to draw down their credit risk at the time.

LoL risk adverse. See SVB.

 

[Lost_in_the_HTTP]

^^^ Likely future spammer. How long before they come back to edit the link in?

 

[GunsMadeAmericaFree]

He ended up using our credit union to get a card, so he is building up his credit score that way. That's the same way I did it a long time ago, too.

 

[Brainonska511]

They used to give college students credit cards like candy. First card I opened in the mid-2000s at 18 was a Citi Dividend Student card. They gave me something like a $5k line of credit. Didn't have to go with any sort of vanilla or secure credit card.