Helping a Friend Start his Credit

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17 posts
darkguy2
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Helping a Friend Start his Credit

Postby darkguy2 » Mon Dec 16, 2013 9:30 pm

I am trying to help one of my friends build his credit and was wondering what his chances were for the student IT card. He is a current full-time student but he does not currently have any student loans or credit history as his parents have a college fund for his college costs. He also does not have a job as his parents also pay for his living expenses. So knowing this what are his chances? Can he use the money he receives from his parents for living expenses as income? If it is unlikely that he will be approved what should he do to start building his credit? Could his parents add him as a authorized user on one of their credit cards? He is 21. I sent a secure email to Discover but I am not sure when they will get back to me.
Discover IT - $5,700
Chase Freedom - $5,700
Costco Citi - $13,000
Sallie Mae - $4,000
Chase Sapphire Preferred - $6,000
Chase Sapphire Reserve - $19,500
Citi Double Cash - $6,500
Amex BCE - $13,000

FICOs: Discover (777), SallieMae (764), Amex (767), Citi (772)
FAKOs: CK- TU (760), EQ (760)


PhoenixDown
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Postby PhoenixDown » Mon Dec 16, 2013 10:21 pm

Kind of interested this in as well for both my sister and a friends daughter.

If your friend applies for the discover and isn't approved, they may give a "second change" where someone else (like a parent) can be added as a joint applicant. We did it all online, very easy.

daniel2304
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Postby daniel2304 » Mon Dec 16, 2013 10:59 pm

I think they should start with a secured credit card. Bank of America, Wells Fargo or Capital One all offer it. They need to deposit $3-500 and the banks give them the card with that amount of limit. Their activities and payments will be reported and it will build their credit report and credit history. Then your job should be educating them how to make payment on time, keep the utilization low etc.

I prefer Bank of America since they have a lower annual fee ($29 I believe). I would stay away from Capital One because I had so many bad experience with them, but they were my oldest card so I have to stick with them.
All my posts are my opinions. All my posts mentioned "you" are merely for discussion-purpose only. No advice is given in any post at any time. It is also impossible for me to put effort to verify every statement that anyone has given.

takeshi
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Postby takeshi » Tue Dec 17, 2013 7:55 am

daniel2304 wrote:I think they should start with a secured credit card.

Secured and credit unions are the usual responses for this sort of question.

samhradh
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Postby samhradh » Tue Dec 17, 2013 3:53 pm

I suggest he applies; worst case scenario is they say no and his score is marginally dropped for six months. For income I would put money he reasonably has access to on a regular basis. If that means his parents give him $1000/month then he should put that.

What I would do is get his parents to add him as an authorized user on one of their cards. Secured is another route but not one I've ever done or had to do (I started my credit history as an AU).

Not having school loans will actually make him more likely for approval. This is based on other posters' denials for their income being too low in relation to the debt they will owe upon graduating.
Citi Forward ($10.1K), AmEx Blue Cash Everyday ($30K), Chase Freedom ($12.4K), Discover it ($5.5K), Barclaycard Arrival ($12.5K), L.L. Bean Visa ($5K). FICO 806 (TU), 812 (EQ), 806 (EX).

darkguy2
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Postby darkguy2 » Tue Dec 17, 2013 4:24 pm

I think I am going to get him to get apply for the student card and put his parents as a joint member. That way he can make his everyday purchases and then his parents can see what he is buying and pay it off like they would normally.
Discover IT - $5,700
Chase Freedom - $5,700
Costco Citi - $13,000
Sallie Mae - $4,000
Chase Sapphire Preferred - $6,000
Chase Sapphire Reserve - $19,500
Citi Double Cash - $6,500
Amex BCE - $13,000

FICOs: Discover (777), SallieMae (764), Amex (767), Citi (772)
FAKOs: CK- TU (760), EQ (760)

daniel2304
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Postby daniel2304 » Wed Dec 18, 2013 12:26 am

Do warn him that as being an authorized user, if he were not disciplined, he would destroy not only his credit but also his parents'
All my posts are my opinions. All my posts mentioned "you" are merely for discussion-purpose only. No advice is given in any post at any time. It is also impossible for me to put effort to verify every statement that anyone has given.

darkguy2
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Location: United States

Postby darkguy2 » Wed Dec 18, 2013 8:51 am

daniel2304 wrote:Do warn him that as being an authorized user, if he were not disciplined, he would destroy not only his credit but also his parents'


Yes I have made sure to tell him that. It can easily turn from a something that is building his credit to something that ruins not only his but his parents. However I doubt they will give him a very big limit that his parent could not pay off. They are rather well off, middle-upper class. He is also a rather responsible guy.
Discover IT - $5,700
Chase Freedom - $5,700
Costco Citi - $13,000
Sallie Mae - $4,000
Chase Sapphire Preferred - $6,000
Chase Sapphire Reserve - $19,500
Citi Double Cash - $6,500
Amex BCE - $13,000

FICOs: Discover (777), SallieMae (764), Amex (767), Citi (772)
FAKOs: CK- TU (760), EQ (760)

thom02099
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Postby thom02099 » Wed Dec 18, 2013 10:11 am

darkguy2 wrote:Yes I have made sure to tell him that. It can easily turn from a something that is building his credit to something that ruins not only his but his parents. However I doubt they will give him a very big limit that his parent could not pay off. They are rather well off, middle-upper class. He is also a rather responsible guy.


I don't mean this to sound harsh, but if he's that responsible guy, maybe it's time for him to cut the strings from the 'rents...or at least start to. Even a full time college student can work a job, either full- or part-time. I know. My 20 year old daughter does. She works full time with a very flexible schedule along with going to school full-time. She's paying her own way, though I did have to co-sign one student loan for her. She's got scores in the low 700s, but a thin file. I had her as an AU on several accounts, but have suggested it's time for her to branch out on her own and get her own cards. I also have a 24 year old son, not in college, but working full-time, who also pays his own way. Having parents to bail them out is not what our children need. They need to not only learn independence, but initiate it on their own. That's what I did waaaaaaay back in the 60s-70s, when I was in college...and glad I did. Yeah, I made mistakes along the way, but they were MY mistakes and I paid for them...and learned from them.
Retired, and in the process of retiring cards!
EQ = 846 EX=828 TU = 836 as of 02/2016

Rory
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Postby Rory » Wed Dec 18, 2013 10:28 am

samhradh wrote:Not having school loans will actually make him more likely for approval. This is based on other posters' denials for their income being too low in relation to the debt they will owe upon graduating.


Having worked directly with students with loans and without in applying for cards, i can say that those with loans got much better limits, which i attribute to the fact that since they deferred their student loans till they graduate, they appear as paid for the 2-4 years they are in college each and every month, it can build a decent score even though they are XXXXX amount in debt and have no real other income to speak of. Its dumb but its what I have seen first hand.
Amex Zync - NPSL (Cleared up to 25k)
Amex BCE - 12000 limit
Amex BCP - 4200 limit
FIA Rewards Amex- 3500 limit
Chase Freedom - 2000 limit
Chase Slate - 2000 Limit
BoA Cash Rewards Privileges- 3000 limit
Barclaycard Rewards MC - 3000 limit
Discover IT- 3500 limit
Marriott PR- 5000 limit
21 years old with alot of life to spend ;)
Its not about the ending, its about the journey,
just as long as the ending is just as good :cool:



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