DawgTalkers.net Forums DawgTalk Everything Else... First time credit for my daughter?

Well my daughter turned 18 a week ago, and is starting OSU in a month. So we figured we should get her credit history going. We applied for a first time credit card, for first year college students, and she got denied. WTH.

Don’t understand what happened, she makes $14,000/yr. So we would have understood maybe a $500/$750 limit but no. Our bank would give her one, but they needed $2,500 in a savings account that has to stay there, with a $50 annual fee. A personal loan of $1000, would also have to be backed by her checking account which has $12,000 in it, no way.

How does an 18yo get credit? How did you go about helping your kids get started without feeling like something shady is gonna happen.

Just from personal experience, I added Sooga to MY account - about 4 years ago. Her name on the card, but under my account, as in, her charges showed up on my bill. And, of course, the bill was paid in full, each month. (hey, she was at college. Never know when a credit card will be needed for unforeseen issues. Mainly, for gas, or emergency's, or 'books')

Her credit score is great - especially for someone her age. She still has that card, but doesn't use it. She got a new one that pays HER cash back on purchases.

My oldest is 14. At 13 you can make them authorize users on your credit card(s). I’ll be doing the same for my youngest when she turns 13 this year.

it's a good idea for emergency and to gain some credit, especially when you can both be on the payment

I would assume that they still do these. When I sold cars, I would get kids with absolutely no credit, and my suggestion would be to get a secured card, and pay it off in full every month. It takes time, but over time, they do develop a good credit history, and can expand their credit profile.

100%... I'll de doing this as soon as my kids are old enough... will be adding them as authorized users, then hoping to co-sign a card with them or something similar if needed when they turn 18 for emergencies....

Also, Frenchy... couple good books for late teens, early 20s... Set for life, Simple path to wealth, I will teach you to be rich, Richest man in Babylon... those are my go to suggestions for anyone who wants to learn more about investing/finances... wish I would have read them when I was younger...

I worked at a bank for over 25 years as a BR Manager and loan officer. With no credit history whatsoever, we would require a co-signor. Also, we were required to have the same criteria for all borrowers, and if we deviated, we had to answer to auditors and we better have a good reason.

Normally parents co-signed. We did create a loan similar to your "backed by checking account" idea, but it required a CD. WE would allow borrowing 90% od the CD amount, and charge 2% above the CD rate and if the loan was paid monthly, it created a monthly on-time payment on your report. After a certain amount of time, likely 6 months to a year, a good score would exist. I even went so far as to recommend 2 of this for the same person. WE did have minimum for both CD and loan amount, $2,000 loan IIRC.

Also, I am not certain, but generally we found that being an authorized user on a CC did not create anything positive on your score because the user had no responsivity or obligation for payment. It has been 3 years since i retired so my memory may be a bit off.

Living in the small, rural, farming community where our bank was, it created a bit of a problem, because parents raised their kids to work hard and never borrow money, for anything other than a house. When I suggested credit at 18, one parent told their son not to listen to me. THat same parent was very upset when their son couldn't get a home loan without a co-signor a few years later. Not saying the kids in my area were not worthy. IT wasn't unusual for a kid to have worked from age 13-14 as a farm laborer and have $20-$40K cash when they graduated and wanted to buy a house.

So, that is my experience. I can only assume, other banks had other underwriting guidelines.

I'll also be adding both of my kids as authorized users to my credit card when they turn 13. Most of the cards also offer a spending "cap" as well, I believe, which isn't a concern for my kids, but just in case you want to be extra safe.

Have you checked credit unions? I believe I saw a promotion geared to students, to build credit history for younger customers, and make them eligible for other credit instruments later. I'm old. When we started to establish credit, small purchases on store credit cards and pay them off; later, one credit card like a VISA and pay it off. Still, a fact of life to handle it well. Good luck, Frenchy. Doesn't sound like you got treated well. I suggest talking about savings opportunities as well; that can help your credit scores indirectly as well.
I had to learn so much on my own about finances when I was starting out on my own. My hat is off to all parents who show their kids the ropes about money. Wanted to add that our CU has videos to watch on different
topics. Best of luck! Get rich!

Thanks for the advice everyone, think I’ll just add her to my cards, see what happens.

I was lucky on figuring things on my own at 18. My parents taught me nothing about money, finances, credit, for some reason it was taboo to talk about. My dad retired 25 years ago and he still wont tell me how much he made, lol.

The ARMY taught us the basics so we wouldn’t get scammed once we got to our duty stations.

I still don’t understand why a basic finance class isn’t mandatory for every high school kid?

Completely agree. My parents were not good at managing finances. They weren't necessarily bad, but they weren't good, either. I had to learn on my own, and I wish that I had learned how to do things like that in high school, vs a plethora of other classes which provided me with no value in life.

I guess I was lucky in regards to school. In my case it wasn't really needed as my dad taught me a great deal about finances growing up.

In regards to my school I did have a class where they taught us about managing your income based on percentages you should spend on housing, food and other things and how to manage a checking account. All pretty basic things but still more than some people know going into adulthood.

Bubba...it may not be a concern now. Give it a few years. LOL

Hey man, it's a part of being a Dad.

Because they are to busy teaching kids to use calculators instead of doing math. Or worse yet having them waste 3 sheets of paper to figure out that 1 + 1 =2 I still remember telling my 7th grade English teacher that I would kiss her entire ass in front of the class if somebody ever asked me what the " past participle" in a sentance was once I was out of High School. (Yep got suspended for that one) yet all these years later nobody has ever asked me that question. We spend way to much time in this country teaching our kids info that most of them won't need after High School, while ignoring things we should be teaching them.

I have felt that for many years. We spend time and effort teaching unnecessary things when we need to be getting our kids ready to be adults and productive members of society.

We assume all kids are going to college, and even then the kids need to have the skills necessary to navigate to adulthood. Life skills need to be a part of education.

We should have a class on basic finances, resume building, and interviewing for a job, along with reading, writing, and aritmetic. Too many kids don't know basic sentence structure, basic tenses, let alone partciples, and the difference between useage of a adjective and an adverb. (one of my personal pet peeves, because it is so prevelant)

Instead we waste time and resourecs on a bunch of unimportant garbage.

Phones should be banned in schools. Kids should learn how to actual;ly do things, not just how to punch things into a phone.

Add in general speech.

All areas have a general accent, which is fine, but you still need to be able to speak. I am not saying that everyone needs to speak like the person on the nightly news, but you need to be somewhat close.

If a person can't speak and have a hard time communicating, they are going to be held back in life.

So you don't think they teaching "reading, writing and arithmetic" anymore? I know in my school we had 8 classes a day. And all of the subjects you mentioned were included. As a matter of fact, they're all required subjects in order to qualify for high school graduation in Ohio. In Ohio you need 4 math credits. You need 3 science credits. You need 3 social studies credits. 4 English major credits. There are other credit requirements but this covers the subjects you claim about "reading, writing and arithmetic".

Complete Courses and Requirements

Ohio law outlines the course requirements all students must complete to earn a diploma. Ohio students must earn a minimum of 20 course units in specified subject areas. Districts and schools may have requirements that exceed the state minimums outlined below.

https://education.ohio.gov/Topics/Ohio-s-Graduation-Requirements/Ohio%E2%80%99s-Graduation-Requirements/Complete-Courses-Classes

Now if you wish to talk about how parents are less involved in the education process and don't hold their children accountable for their grades and conduct which causes their children not to care about learning that's a different topic all together. But I believe laying it on our teachers and school sytems is a rather superficial idea.

Missed this thread went it went around, I was away for a few weeks.

100% yes to adding kids as authorized users.


110% yes to this book.



DYK??

Only 18% enroll in a 401k when offered -- yet 70% enroll when the employer requires that you 'opt out'!

We're creatures of habit and we are lazy. This is an autopilot approach to saving and retiring with a huge nest egg. And it's not complicated, it takes much of the self and media imposed 'mystery' out of investing and describes clearly why that intimidation is unnecessary.

Not only that, but is a very entertaining read as the writer has a great sense of humor. I knew immediately it was written for people much younger than me but still learned a lot.

Two huge thumbs up.

Thanks will check it out

At 16, added my son to 2 of my credit cards as an authorized user that typically holds no balance and has very high credit limits. He never had access to the cards and I would periodically use them to make random online purchases.

At 18, he had a credit score of 750. He is now 21 and has raised his score to 803.

This was one of the best gifts I could have given my son. It will save him thousands upon thousands in interest fees.