How can my 20 yo DS establish credit?

[Snoozan]

I've got a 20 yo DS who is not going to school, but is working full-time. He still lives at home(& will probably be with us for a while!) He needs to start establishing credit, but I'm not sure what's the best way to start. He does not have a credit card-just a MasterCard debit card, so he pays for everything up front. He doesn't have any other debt-outside of his car insurance, which he paid off in several months. Any suggestions? Should he get a credit card with a low credit line and use that instead of his debit card?

 

[elgerber]

I would suggest getting a low limit visa or store credit card. Just make sure to keep it paid off. Even getting a store card and just charging one purchase every couple of months or so and paying it off will help. I can tell you, from what I see in the mortgage business, you should have 3 established credit lines (good payment history etc) to be considered a good credit risk.

Erika

 

[Kermit]

Yes, definitely get him a credit card. As long as he's responsible enough to use it wisely, a credit card is the best way to establish credit, and he will be very grateful to have a good credit history once he starts to make more money and needs to buy things (like cars and a house) on credit. I know a few people who didn't get credit cards in college because they were the type of people who believed that credit cards are always bad, and they really struggled when they wanted to buy themselves nice things later in life but couldn't.

 

[TerryKitten]

If he has a favorite brand of gas, perhaps get a gas card for that company. Then pay it off at the end of the month. Quick easy way to have some credit. Low limit credit card is good too.

 

[Marla Hellwig]

Another suggestiong for a gas credit card

 

[mum4jenn]

Way back when I was trying to do this I went to a jewelry store and purchased a ring and opened up an account there. After I made a few payments I had no problem getting a card. I think the ring was around $100.(not sure coz it was over 20 years ago!!!)

 

[helenabear]

When I was about 19 or 20 I got my first credit card. I only bought books or other NEEDED school supplies and made sure it was paid off every month. That was enough credit to let me get my first car right when I graduated. I still keep my credit card paid off monthly (3.5 years after graduation) and between the car, apartment, and the card, I had built enough credit to buy a house when I was 24. Good luck getting his established

 

[The Mystery Machine]

I suggest that he start up with a good credit union. They can be very helpful in this department. For example they tend to be more flexible with small signature loans for getting a lump sum of cash in case of emergency. They could instruct him toward his finanacial goals.
Also he can get his credit score and he will know where he stands financially.

I recommend getting his credit report. You just never know what is on there.

 

[peg2001]

Perhaps a guaranteed credit card would be the way for him to go. These work by opening an account with, say, $500. The credit card then has a $500 spending limit on it. As long as he pays off the card, the money in the account is not touched, and he begins to establish a credit rating.

Peggy