How grads can build good credit

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Q. My daughter is getting her first job. She still lives at home. What can we do to start her off with good credit so she will be approved for an apartment?
— Dad

A. It’s never too early to start thinking about managing your credit and taking steps to ensure that your credit scores remain sound.

The fact that your daughter is employed is a major step in the right direction, said Timothy Brunnock, a financial advisor and attorney with Trinity Financial Strategies in Morristown.

He said even though she still lives at home with you, there are a number of things she can do to establish credit and make sure her scores remain high.

You didn’t mention whether this is her first job after college. If it is, like most young adults, she probably has student loan debt, and you, in fact, may have been called upon to cosign for her loans. Brunnock said you need to make sure that these student loan payments are made on time or, ideally, even a couple days early. Even one late payment will affect her score.

Brunnock said many college students are also inundated with offers for credit cards. While it may be tempting to “buy now, pay later,” the reality is that this is often a dangerous trap for those with little if any financial experience.

He recommends she put an extremely manageable monthly charge — $50 to $100 — on her one and only credit card. She should then pay it off early and in full, every month without fail.

“If she does this religiously for the first six months, you will probably notice that the credit card company will offer to increase her spending limit,” Brunnock said. “While this will again seem tempting, please do not fall for it. Instead, continue to put a manageable amount on the card each month, but pay it off early and in full.”

This will demonstrate that she can in fact manage her credit, and it will be reflected in her credit score.

“A good credit score will help not only with being approved for an apartment, but will also give her access to better interest rates on everything from cars to home mortgages further on down the road,” Brunnock said.

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This post was first published in April 2016. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.