+1

Stick around, it only gets better !

Hi, I am new here, but have been lurking for about a month:cheesing:
I am learning so much here!
Montique

So how do we "show" that we are able to make payments? I have 18-19 months credit history so far. O_o

When you apply for a credit card or credit line increase after 2/22/10 the banks/credit unions have a formula to determine what your credit line would be. This is based off of the income you provide on your application. I would expect that many financial institutions will be a bit more careful with extending credit to under 21 peeps so I would expect that they may ask for "proof" i.e. paystubs and or previous years tax forms.

On the other hand, the banks are following the law just by asking for your income on the application for credit. Many do not actually request proof because they have done their job by asking. If the consumer falls past due and then tries to blame the bank (only in America!) then the creditor could pull out the application and countersue for a falsfied application.

Oh, so it appears as though if you're under 21, you need to show proof of income OR a cosigner? So, its 1 or the other, not both?

"To open a credit card account, people under the age of 21 will now need either a co-signer or evidence that they have enough income to make monthly payments. In addition, card companies can no longer market cards on college campuses."

I suppose that 18-20 year olds can obtain credit if they have the income to back it up. It would depend on what each creditor has in place to determine what the annual income should be (each creditor has a mathmatical formual for determining the credit line-if any-for an applicant). I would also expect that they will take more effort to obtain proof of that income as opposed to somebody over 21. Lets say a 19 year old makes $12K a year working part time and already has two credit cards with limits totaling $2,000 as well as a student loan and a car loan. This said 19 year old goes and applies for a third account. That creditor would see a $12K annual income already reduced by other obligations. So an approval for a third or fourth account would be slim or you would be given a very small credit line.

I guess we won't know until some of you actually go out and do it. :

Ahh. I just found this]Protections for underage consumers. If you are under 21, you will need to show that you are able to make payments, or you will need a cosigner, in order to open a credit card account.[/I]
If you are under age 21 and have a card with a cosigner and want an increase in the credit limit, your cosigner must agree in writing to the increase.

Oh, so it appears as though if you're under 21, you need to show proof of income OR a cosigner? So, its 1 or the other, not both?

Ahh. I just found this]Protections for underage consumers. If you are under 21, you will need to show that you are able to make payments, or you will need a cosigner, in order to open a credit card account.
If you are under age 21 and have a card with a cosigner and want an increase in the credit limit, your cosigner must agree in writing to the increase.[/I]

So how do we "show" that we are able to make payments? I have 18-19 months credit history so far. O_o :

Hey, Colo mind providing some literature on the co-signer situation? I'm 19 myself and that concerns me; as I am going to apply for an American Express this fall. I searched briefly and couldn't find anything about being 21, but I may have looked in the wrong places.

Thanks, Joey.

Ahh. I just found this]Protections for underage consumers. If you are under 21, you will need to show that you are able to make payments, or you will need a cosigner, in order to open a credit card account.
If you are under age 21 and have a card with a cosigner and want an increase in the credit limit, your cosigner must agree in writing to the increase.[/I]

Hi 68,

As Brian said, a lot of people seem to have luck with Macy's. If your son shops there then that would be a good choice. Again, he has to be 21 regardless of his current employment status.

PS. He should only apply for a Best Buy card if he is planning a major purchase and wants to take advantage of an interest-free promotion. He should stay away from their MasterCard as it is an HSBC-issued sub prime card. Patience is everything in the credit game.

Hey, Colo mind providing some literature on the co-signer situation? I'm 19 myself and that concerns me; as I am going to apply for an American Express this fall. I searched briefly and couldn't find anything about being 21, but I may have looked in the wrong places.

Thanks, Joey.

Thank you so much for your advise, it is greatly appreciated

Hi 68,

As Brian said, a lot of people seem to have luck with Macy's. If your son shops there then that would be a good choice. Again, he has to be 21 regardless of his current employment status.

PS. He should only apply for a Best Buy card if he is planning a major purchase and wants to take advantage of an interest-free promotion. He should stay away from their MasterCard as it is an HSBC-issued sub prime card. Patience is everything in the credit game.

According to the new laws under the CARD Act, consumers under the age of 21 would only be able to obtain a credit card if they have their own income and have a co-signer.

Thanks Brian...

One more question for everyone (sorry, I have a lot ) I was reading about the new credit card act that Colonative mentioned. From what I have read, because my son is on his own and working full time, the "21" age rule would not apply. Am I reading this wrong?

To open a credit card account, people under the age of 21 will now need either a co-signer or evidence that they have enough income to make monthly payments...this ccame from one of the articles I read.

Thank you so much for your advise, it is greatly appreciated

I would go for Macy's. Easy approval process (even quicker in the store). You get like 20% off your 1st day. Even if he starts out with a low CL, you can call in every 3 months and they'll do a "guideline increase". The only thing that stinks now is that they do a hard pull every time you call in for the increase, so I might keep it to calling in every six months. My card in 2 years has gone from; 100-200-300-500(I complained about the 100 CLI so they gave me another 100)-700-1000 and now to 1700. Overall, I think they are an awesome bank to work with.

Thank you so much for your advise, it is greatly appreciated He won't be 21 until March 6.

Any ideas as to which store card would be best to apply for? He shops at Best Buy, Target, Lowe's, Macy's, and occasionally Walmart.

Thanks again...

Hello everyone...I am actually trying to help my 20 year old son avoid the credit mistakes I have made. My credit is horrible and we are keeping an eye on his to try to build it. Here is an overview...

He is 20 years old, full time job for 1 year 3 mo. One first premier card with a $250 limit paid as agreed for 6 months. That is the only thing on his report. All three bureaus list his score as 702, not sure how this can be???

Here are my questions... Is there any store, gas or mc/visa that he might be approved for? We only did the First Premier to start building. Also, I have a friend who is a manager at the Ford dealership who said he could get him approved, should we open a low balance auto loan to build credit?

Thanks for your time, any help is appreciated. Just want to help him succeed and teach him the importance of credit responsibility (due to my life being much more difficult as a result of my own irresponsibility). He is very responsible for his age but this is all new to him.

Hello 68,

A 702 score is not unusual for early 20-somethings; however, there is usually no meat and potatoes behind it. Meaning, denials are still a reality because creditors would not see much history.

Question...when does he turn 21? With the new CARD Act that passed on 2/22/2010, creditors are required to have anybody under the age of 21 to have a co-signer. And if your credit is in the toilet then you co-signing for him will not be likely.

An auto loan would be helpful because a good mix of credit helps the score in the long run. But he shouldn't go buying a $25K vehicle unless his income can back it up.

So to recap:

1) Wait until he is 21
2) Apply for a Capital One card
3) If approved for Capital One, CLOSE the First Premier
4) Have him apply for ONE store charge card to where he shops most
5) He should not apply for credit that he does not need.
6) Have him join a credit union so that in the future he can apply for another Visa/MasterCard when he needs it and it will be at a good rate.
7) Again, advise him to have restraint; only apply for credit when it is needed.
Avoid subprime banks (most HSBC issued cards such as Househould or Orchard Bank, Hooters MasterCard (they have helped many here rebuild, but your son is building and should not have to resort to that card), ANYTHING First Premier or Barclay's Bank Delaware. If your son is careful with Capital One he should be able to move on to the prime banks such as American Express, Bank of America, Chase, Citibank, Discover or Wells Fargo or a good credit union card.

Good luck.