My daughter is trying to get her first credit card as a college student. They have denied her based on a credit report from you. How can a student that has never had any credit of any kind have a negative credit report?
The fact that your daughter was declined doesn't necessarily mean she has a negative credit report. It may be because she has no credit history at all. Without a credit history lenders have no information to help them asses the risk of lending to your daughter. Therefore, the company may choose not to extend her credit. She should ask the company for the specific reasons she was declined so that she knows what she needs to do to improve her credit references.
Since she was declined, she can request a free credit report from the credit reporting company the lender used. Doing so will enable her to verify that everything is being reported correctly, or that there is no credit history appearing.
There are some several steps your daughter can take to begin building or rebuilding her credit history. One would be to apply for a secured credit card with a local bank. A secured card is typically linked to a savings account. The limit usually is a portion of the amount of the savings account balance.
Another possibility would be to become an authorized user on a family member's credit card account, provided the account shows no late payment history. For instance, if you were willing to add her as authorized user to your credit card, the account would appear on her report as well as yours. She can also ask a family member to cosign for a small personal loan so that she has the opportunity to show she is capable of making the payments on time, but both should understand the full impact of co-signing.
Once she has an account or accounts in her name, the single most important thing she can do for her credit history is to make sure to always pay all of her bills on time. Eventually she will build a credit history that will enable to qualify for new accounts on her own.
Thanks for asking.
The "Ask Experian" team