Before your soon-to-be-trainee ships off to train for the world’s greatest military, it is a good idea to help them begin building their credit. This is most likely not something they’ll think about on their own.
In my experience (Mortgage Loan Officer of 10+ years), many young adults have zero idea how to navigate building their credit. They are blessed to have YOU to guide them.
A good way to begin credit for a young adult with no credit score is to help them obtain a ‘secure credit card’. This type of card allows you to put a monetary ‘down payment’ on the card, utilize it as a credit card, pay the bill each month, and begin building!
Example: I helped my young Airman (son) obtain a secure credit card from a bank before he shipped. I also added my name to this card and provided the $200 required to open the card (the ‘secure’ part). The bank sent cards in both of our names. He used this card to put gas in his vehicle and paid the bill in full on the statement’s due date. I also used the card a few times for small purchases and paid it in full. In less than 6 months he had a decent credit score! Approximately one year later, the bank flipped this ‘secure card’ into a regular credit card, his limit increased to $700, and I was refunded my $200 deposit. Easy peasy!
Another cool way is to add them as an ‘authorized user’ to your credit card. Be sure to inquire with the creditor that they’ll be reporting to both social security numbers. This will ensure that your trainee’s credit will build up as the card is used and paid off on time each month. As the next few months pass, you will see their credit scores increase!
These are just a few ways to help them begin their credit-building journey. If you have any tips and tricks that helped your young adults, we’d love to hear them!
