When my homeschooled daughter started college, she started receiving tons of credit-card offers. She’s always had an unusual ability to learn from other people’s problems, so she happily announced she was throwing them in the trash. But when I explained that a credit score is, like it or not, a requirement of being a functioning adult, and if she was smart she could start building good credit now, she was willing to learn. We read the CC offers together, and I showed her how to look for critical information like annual fee, whether it was a “preapproved” offer or just an invitation to apply for credit, and the offered line of credit and interest rate. I explained that even though she had income since she was on a full academic scholarship, she did NOT want to be carrying a credit card balance as a student (or ever, other than to pay off large unexpected expenses like car repairs). So interest rate was mostly unimportant, as when she used the card, she’s be paying it off before any interest was applied. First, all the “you are invited to apply” offers went in the trash. She didn’t *need* any credit cards. Next, of the “you are preapproved” offers, everything with an annual fee went in the trash. That left a few “preapproved” no-annual-fee offers to compare.

At my suggestion, she accepted a credit card from Capital One. It had a pretty high interest rate and a fairly low line of credit (less than $500 IIRC), but I’d had a CO card for years, it’s manageable online and I knew they follow through with their commitments AND report to the credit bureaus. I told her she should use the card occasionally, but only when she had the money in the bank ready to pay for what she charged as soon as the bill came in. She listened to me, used the card occasionally, paid it off, and continued to throw credit card offers in the trash.

After a year or so of building her credit with the Capital One card, the offers changed a little. She still got too many invitations-to-apply and offers for cards with annual fees, but she started to also get preapproved offers with higher limits from fussier credit companies. Again at my suggestion, she accepted a card from Chase. She wanted to know why she needed another card, since she had one in good standing. I pointed out the higher credit limit and slightly lower interest rate and said that Chase would look better on a credit report than Capital One, who will give a card to just about anyone.

So now this college senior has two credit cards in good standing, that she uses occasionally and promptly pays off, and several years’ worth of green “as agreed” reports to credit bureaus. Her credit score is apparently better than mine, because she is now receiving “preapproved” offers from Discover and American Express. I suggested she take the Discover card, because of its low rate and cash back program, but I don’t think she has. I told her AmEx has lots of benefits, and that my father used one for years because working for ABC-Television, he could be sent across the globe at an hour’s notice or suddenly need to take 50 people out for dinner, and AmEx with its no-credit-limit is unsurpassed for that kind of travel. But I also told her if she is ever in a job where she needs AmEx, she won’t need me to tell her that she does.

Naturally, at this point she doesn’t realize how valuable her good credit report will be later. She won’t realize it until she has graduated and wants to rent an apartment or buy a car or house or has to set up accounts with utility companies. Even then, she may not realize how smart she was to listen to me, until she hears co-workers or friends moan about being turned down for an apartment lease or having to pay a higher interest rate for an auto loan. But at some point, I’m pretty confident she’ll come give me a hug and say “thanks for telling me how to build a good credit rating!” And I’ll just smile and thank God for blessing me with a daughter who was smart enough to listen.

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