Building credit isn’t an overnight task, it takes time and a little effort to have a good credit score. The reason for even HAVING a credit score nowadays is that more and more things are being based off of that score;

• Insurance premiums
• Rental agreements
• Mortgage purchases
• Any type of consumer loan
• Employee Screening for Jobs

Like it or not, the credit rating and FICO score is affecting more and more parts of people’s lives.

The FICO Score

FICO is the acronym for Fair Isaac Corporation, a publicly-traded corporation (under the symbol "FIC") that created the best-known and most widely used credit score model in the United States. The FICO score is calculated statistically, with information from a consumer’s credit files.

The FICO score is primarily used in credit decisions made by banks and other providers of secured and unsecured credit. Banks and other institutions using such scores as a factor in their lending decisions may deny credit, charge higher interest rates, demand more collateral, or require extensive income and asset verification if the applicant’s FICO credit score is low.

From Wikipedia – FICO Credit Score

Stupid Card Tricks

Because 15% of your score is based on your credit history, new college students or "young’uns" as I refer to them, are at a distinct disadvantage. Coming right out of college, many times with large student loans and no jobs (yet), doesn’t make for a very rosy picture to most lenders. This adds up to higher interest rates on ANY loan that is applied to; Car, Mortgage, consumer, etc. and many times being turned down for that first apartment in the nicer parts of town due to a low or non-existent credit rating.

The setup – This only works if you have parents that already have a long established history of GOOD credit. If that isn’t the case, this trick probably won’t work for you.

The action – What happens is that the ‘young’un’ is added to the parent’s credit card with the longest history (known as piggy-backing). The student doesn’t need a card to that account however.

The reaction – By having an account with a long history, it is easier to get reduced rates and additional credit in the future. This saves you time and money by not having to ‘work through’ higher interest credit until you get to the lower interest credit. It lets you ‘piggyback’ on the parent’s history.

Caveats (of Course)

First, this works for now. The FICO score is rumored to be changing format and might not allow this piggybacking in the future.

Second, credit is a tool. Dynamite is a tool. Both can help you move mountains, or cause your life to fall to pieces (usually in little itty bitty chunks).

Credit isn’t something to muck with until/unless you can handle it. Learn about it, use it to your advantage, and at the first signs of trouble, stop and get help!