HNB asked in Business & FinanceCredit · 1 month ago

How can my 18 year old son start building his credit?

Can I request my credit card company send me another card with my son’s name on the card but the card is still under my name? Can he use the card and pay it off monthly to show he is responsible to pay what is on a credit card? Will that be building up his credit that way?

Or does he have to apply for a credit card himself  and use it and pay off by himself? He does have some savings and checking account with 1 bank. But he doesn’t have a job do I am afraid he will be rejected. Do I have to co-sign on his credit card application in order for him to be approved for the card ?

7 Answers

Relevance
  • 3 weeks ago

    A card in your name won't do a thing for your son's credit. He needs to get a card in his own name. And use it regularly and always pay in time. It doesn't matter if he only has a tiny credit limit. It will start to raise his creditworthiness.

  • A
    Lv 7
    4 weeks ago

    He can't build credit in his own name when you are the account holder, he needs to get a job and then start with a secured card, then if he is responsible the bank will offer him a  500 regular credit card after  6-12 months of on time, in full payments

  • 4 weeks ago

    What my parents did when I was young was put the internet bill under my name with automatic payment.. after a couple a months I applied for a credit card and was approved in 1 year I had a 700 credit score  

  • Kim R
    Lv 7
    1 month ago

    Adding his name to your card will NOT help him build credit, so forget that idea. He has to get a job first, and have his paychecks put into his own bank or credit union account. After maybe 6 months of him proving he can hold a job, he can apply at his bank or credit union for a secured card (ask them what their requirements are; it varies). Once he gets that, he can make small purchases with it each month, then pay it back IN FULL and ON TIME every month to prove he is responsible with money. After doing this correctly for a year or so, he can apply for a regular credit card, such as Visa (get one with no annual fee). Always pay it on time, and in full to avoid interest. Paying just the minimum may be enticing, but don't do it; that's for suckers. This is how he builds a good credit score. 

  • How do you think about the answers? You can sign in to vote the answer.
  • 1 month ago

    You can give permission for your son to use your cards, but that only affects your credit, It doesn't build his. I was unable to get my first credit card until I was 24 - but times were a little different then.  I was already a homeowner (at 22) and had a couple of small in-house credit accounts (furniture stores) but Sears turned me down for their card until I was 24. In fact, I don't think I got my first Visa card for another year or so after that.  Didn't really need one, I always dealt mostly in cash.

    I financed my first car at 19 and needed my dad to co-sign. Paid it off and two years later, got my next car on my own. Paid that 3 year loan off in one and traded it for my first new car, bought the house that same year.  Maybe Sears thought I had too much debt when they turned me down.

    But as I said, things were a little different then.  If he can't get his own card just yet, then he starts with a secured card. You CAN help with that if you want.  Have him put up some of the cash, you put up the difference. Get a $1,000 secured card.  When he charges something, he is essentially borrowing his and your money.  But it works just like any other card. You make your payments, paying each statement in full so that you aren't charged any interest. THAT builds credit.  Not making payments under the thought of 'they already have my money, why should I make payments' will DESTROY his chances of building good credit.

    Now, if you cosign (actually, co-borrow, co-sign is a  misnomer) for a car or something else, that WILL help him build credit, because he is making the payments and the lender comes to you only if he doesn't pay.

    Building credit is all about learning to be patient and disciplined. How did YOU build your credit?  The best thing you can do is teach.

  • Sky
    Lv 7
    1 month ago

    Getting his name on a card from your account won't build any credit for him because the account is based on your credit.  One thing he can do is apply for his own credit card with a very low credit limit.  If he can't get anything, he can go to his bank and get a card with a secured line of credit, meaning he pays them however much he can and they give him a credit card with that same amount as the credit limit.  As long as he keeps making payments on time he will build credit, and he can close the account and get his money back at any time (minus any outstanding balance), but if he should default on it they would keep the pre-paid money to cover his balance.

    Another option is to apply for a small personal loan.  Even if he doesn't spend a cent of it, all he'd have to do is pay it back on time and build credit that way.  He should even pay off the loan early to save on the interest charges.

    When he does get a regular credit card, I recommend he pay the balance in full twice a month.  That way he will always keep a very low debt-to-income ratio and a low credit utilization percentage (how much of the credit limit is being used) as well as always having payments in on time, all of which builds credit, and that will avoid ever having to pay any interest since credit cards always have at least a 25 day no-interest grace period.  But you have to be sure to drive it into his head that a credit card is not free money; he absolutely has to spend no more than he can afford based on his income, exactly as if he was paying cash for everything but in this case he's just setting the cash aside to pay off his tab with one payment instead of numerous smaller ones.

  • 1 month ago

    He probably won't build credit if he tries to apply for a credit card himself.  Most banks automatically reject anyone who applies before age 21.  He'd have a better chance with you are a cosigner, but the main issue is that he has to apply somewhere that won't reject him just for being 18 -- or, he can wait until he's 21.

Still have questions? Get your answers by asking now.