How to help your young adults get good credit

[honeylady]

I don't often post, usually too busy, but I am helping my daughter get good credit and it is actually working and I would like to share it with all of you.

When she was 19, I bought her a car and put it in both of our names. We had to finance it and, because the car was also in her name, the loan was in her name also. I kept up those payments and was never, ever late.

When she was 20, I had her sign up for a credit card with USAA which I had to guarantee with a $250 CD deposited with them. She had a $300 credit limit. I did not give her the card. I ordered small things from the internet. I then made sure that the payment was made on time and for more than the minimum amount. About a year later I got in the mail a cc offer from CapitalOne for my daughter. I went ahead and filled out the application filing in the information accurately. She is working and has been at the same job for 1 year. She then instantly qualified for a cc with a $3,000 limit. Again I didn't give her the card. I used it for ordering things from the internet. I paid it on time and more than the minimum amount.

She just recently applied for a roommate situation and was accepted by the landlord based on her good credit score and income.

I still don't intend to give her the card because she is still too immature to use it properly. But when she finally grows up and is ready to be a responsible adult, she will start that process with good credit.

These young people now have it so hard. Nothing comes to them easily - not like it did when I was coming up in the 70's. They need lots of help.

[wasupaloopa]

1. She needs to establish a credit history by her actions not yours.

You are not helping her in any way. Teach her how to manage her money on her own.

Let her apply for a credit card let her use it and let her pay off the balance each month and she will establish good credit and good credit usage.

[honeylady]

4. She's is learning.

She pays her own rent and her car insurance. You can't do much these days without good credit. She was able to get a place to live without me having to guarantee her lease. I sure like that.

[SummerSnow]

2. Sounds good. I went to their website, do they only take military people?

[honeylady]

3. Yes they do and I would imagine any insurance company will do it.

[MissB]

5. I got both my boys a card on their name at age 16.

I use USAA, so they just issued one in each of their names but the charges are on my account. I had the option of reporting the account activity on their credit.

They understood they were to use them on things like gas for our truck, groceries if I asked them to stop and get some things and application charges for college.

Now that they are at college, they use the cards for things like books and flights home. They can make any charge they want up to $25 without talking to or texting me, though they don’t make a bunch of small charges each month.

They’ve never abused having a credit card that Mom pays for- and I don’t intend to keep paying the charges after they graduate.

[doc03]

6. I co-signed a loan for my neice, she never made a payment on time in 8 months out

of 12. I ended up paying it off it was ruining my credit score. Never again. Oh she said thanks after I paid nearly $6000.
That's what you get for helping.

[missingthebigdog]

7. With all due respect, I disagree with your approach.

Getting a credit card in her name, then using it yourself is, essentially, credit card fraud.

Young adults need to be educated on how credit works, and guided through the process. Doing it for them because they are "still too immature" is controlling and does not help them learn to be responsible.

Besides, at this point she presumably knows that her credit is good. If she hasn't applied for cards and tanked her credit by now, she probably isn't going to. . .