Credit history: What your college kid needs to know

Credit history starts sooner than you think: Your college kid has no credit and mounting credit card offers in the mail, so parents need to have the talk about the importance of a good credit history.

Amy Green/Orlando, Florida
Credit history can start in college, or even before. Bankruptcy attorney Roy Kobert volunteers with CARE to teach financial literacy among high school and college students in Central Florida. He got involved after noticing debtors were getting younger and his own teenage son was getting credit card applications in the mail.

Establishing a credit history is harder than it used to be – lenders are being extra cautious with new applicants. If you’re applying for credit for the first time, here are some tips from the National Foundation for Credit Counseling:

• Start slowly. “Applying for too much credit at once can send the wrong signal to the lender, making it appear that you are desperate for credit,” said the NFCC. Also, too many applications for credit cards can hurt your credit score.

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* Co-signer. If you have been denied credit, see if a parent or other relative will come aboard as a co-signer. Just remember, if you don’t make payments on time, you can damage the co-signer’s credit as well as your own.

* Three lines of credit. “You’ll need at least three lines of credit, or else your file will be considered too thin for the all-important credit score to evaluate,” said the NFCC. But avoid using more than 30 percent of your available credit.

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• Variety. The credit score algorithm likes to see different kinds of accounts. So don’t apply just for credit cards — when appropriate, also obtain a closed-end account, such as a car loan.

• Secured credit card. To get this kind of card, you put money in an account with an issuing bank and get a credit line for the same amount. “Handling this type of credit responsibly will likely lead to being offered an unsecured card,” said the NFCC.

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