Don't Have A Credit Card?

Question:

Hey, I’m a college student, with what I thought was fairly good credit based on my age (I’m 21). I have two credit cards right now: a 5 month old $ 300 Orchard Bank secured card and a 3 month old $ 800 unsecured Wells Fargo College card.

The mtvU card is marketed toward college students, so why would they deny me on the basis of “insufficient credit history?” How much of a credit history do they expect me to have if I’m in college? This doesn’t make any sense.

I’m building my credit so that my dad won’t have to co-sign for me when I need to get a car loan.

Answer:

Your age has nothing to do with building a credit history. Just because you’re young and just starting out, you must think you have a “clean slate” by having nothing negative on your history. Nothing negative is a good thing, but not having an established track record is not good.

How much debt are you carrying on those cards? Your debt to limit ratio must be low. If you’re maxing out your cards, that’s not good.

Have you ever been late on a payment? Always make your payment on time. That’s one of the biggest factors in a good history.

How much money do you earn? While your income doesn’t reflect in your credit history, you’re ability to pay your bills does. Income is a factor in deciding whether or not to issue a card.

Also, know your credit score. The higher the better. Click here to get a free credit score check from Credit Karma. There are no monthly memberships or hidden surprise charges. Once you know your score, you can shop for credit cards on the site. They have them grouped by credit score.