Credit, one of the most important aspects for your life and your future, is a cruel mistress. Most people don’t even fully understand it (aka this guy), but it will follow you around and assist in dictating your whole life. At 22 years old, I just started thinking about my credit. I was doing this a few days ago, because I was throwing around the idea of getting a credit card. I was talking with the people in my office about some good credit card options, and which credit cards offered the best rewards. While going through options, one of them mentioned something that I might want to do before applying.
Maybe, just maybe, I should check my credit score. Chances are, with my age, and my ZERO credit history (sans my 5 month electric bill), I might not be able to even get a credit card! So, my coworker recommended a website, CreditKarma, to find my credit scores for free. I thought about it, and figured why not? It couldn’t hurt, and I might as well know what I’m dealing with.
What My Free Credit Report Told Me
What I found not only shocked me, but also pissed off all my coworkers! It turns out, my credit is not only good, but for my age, it’s amazing. I found that I was sitting in the mid to high 700 range for both my Transunion and my Equifax score, well above the average credit score. Now of course my first question was how this could even be possible. I’m 22 years old, and haven’t even had an actual bill in my name for that long.
One word…Parents. Yup, the reason my credit was the way it was, was the doing of my parents. A couple of years ago, my parents put me as an authorized user on one of their cards. Apparently, because of this, I had piggy-backed off of their account. Not only do I have years of no late payments, my credit history is older than I am! My parents opened their account in 1985, so since I was piggy-backing off of that, I have a 29 year old credit history.
Time to Research Some Credit Cards!
At this point, I figured I’d be able to get myself a credit card, but I wasn’t sure exactly which one I would want. There are a countless number of different credit cards to choose from out there. On top of that, each one of them has their own unique rewards, interest rates, pros, and cons. So I sat down with the people who helped me into this situation…my parents! With the help of my parents, and the FatWallet Finance Forums, I had decided on the one.
My First Credit Card
So, after all the thought and conversation, I finally decided on the Capital One Quicksilver credit card. With the 1.5% cash back on everything, PLUS $100 after I spend my first $500 on the card within 3 months (easy with monthly house bills). After filling everything out, I patiently waited for the decision. After what felt like forever, it finally said it…..Accepted! It told me when to expect the card, how long I would be enjoying the 0 APR, and how much of a limit they were giving me. So now, not only will I be building my credit by putting whatever I can on here and paying it off, I am also earning 1.5% cash back on everything!
Moral of the Story
Nurture your credit score! If you are young and without credit, ask your parents if they can put a bill in your name, or maybe even co-sign on a credit card with you. Parents, help your kid with their credit! Having decent credit during a younger age is a major advantage that you can influence in a great way. Go ahead and add them on as an authorized user on your credit card. Give it to them for emergencies, or when you want them to go out and pick things up for you. This comes in handy when you’re feeling lazy, but you want takeout. Either way, when your child understands how much you did to help their credit score, they’re going to be eternally grateful. I know I was!
Tips from Top Financial Experts:
While writing this post, we reached out to some financial bloggers to get their thoughts, and we had some great responses:
Jeff Rose, author of the best seller, Soldier of Finance, told us that he had an intern that had the complete opposite experience that I did. You can read about his experience at Rose’s Website.
We were also able to get to a great article by Eric Rosenburg about what goes into your credit score. You can find that article at his website, Personal Profitability.
Harry Campbell was able to provide us with a couple of his articles, one on how adding someone as an authorized user will build their credit, and another on how Amex can backdate the credit start date of authorized users.