How to get a credit card with large loans


Q. I am trying to help my son, who is doing his residency. He never got a credit card while in college or dental school, and now, because he has such large debt from school loans, he has been denied twice in the past two years for a bank credit card. My husband even put him on one of our AmEx accounts but he’s still been denied. How can he build his credit?
— Mom

A. Medical and dental residents often find themselves between a rock and a hard place.

It can be difficult to qualify for the best private loans or credit cards with little to no credit history and piles of student debt.

But how do you build credit history without those loans and credit cards?

First and foremost, you need to make sure the student loan payments are being paid on time, every time, said Matthew DeFelice, a certified financial planner with U.S. Financial Services in Fairfield.

“Though this might sound obvious, most residents are so busy that they often lose track of their due dates, which can negatively affect their credit score further,” DeFelice said. “When carefully and sensibly handled, the student loans can help your child qualify for their first car loan, first apartment, and even their first credit card.”

Unfortunately, he said, this is not an overnight process. Time and consistency are the two primary factors required to build a positive credit score.

That being said, there are some credit cards that are “student friendly,” meaning they can be easier to qualify with no credit history and/or loans.

DeFelice said Capital One, in particular, has several options that are great choices for first cards.

“Check out their Journey Student Rewards card, which is specifically designed for students,” he said. “Don’t expect the card to have frequent flyer points or other bells and whistles, but that isn’t the goal here.”

DeFelice said if that doesn’t work, try adding your son’s name to one of your bank credit card accounts, making him an authorized user. AmEx may only report activity and payment history for the primary cardholder, he said.

“Most – but not all – bank credit card issuers report account activity to an authorized user’s credit reports,” he said. “Not only can he use the card for purchases but it can help build his credit – assuming both you and your son manage the card spending responsibly.”

Another option is to get a secured credit card, one that requires you to make a small deposit to be used as collateral for the account. After some time showing he can make these payments on time, he’ll have a better chance applying for a traditional credit card.

DeFelice said if your son is not living at home with you, he may also be able to get positive credit reporting for his apartment rent. Paying rent on time isn’t always reflected on your credit, but there are several services will help ensure positive rent payment history gets reported, which can help you build credit even with heavy loan balances and no credit cards.

“eRentPayment, for example, reports to all three major credit bureaus — Experian, Equifax and TransUnion,” he said. “These services typically cost a small fee – eRentPayment charges $3 per transaction or $10 per month – and your landlord must be registered for you to be able to use it.”

If your son has always paid your rent on time and the lease is in his name, it may be worth trying to get it reported on his credit.

Email your questions to .