How to build good credit?

[Cathy]

My mom and I want to ask how to build good credit for me. I’ve just turned 18 last month and my mom wants me to start building my own credit history, so she added me to her credit card. So now she has her own card and I have my own with the same account number.

When I use my credit card with my name and pay it off on time to avoid interest, will this help me to build good credit for myself? How do they know who is paying it off if we both have the same credit card number?

Thanks

P.S. She has a good credit history, if it matters.

[Scott]

Re: How to build good credit

Having your name added as an authorized user on your mom’s credit card is really the best way to start building credit.
You should thank your mom for doing this. I wish my mom had done it when I was 18. Things would have been much easier for me had she done the same.

I just want to make a few clarifications. There are two ways to do this:

1. To add you as an authorized user.
2. To make the account a joint account.

As far as credit history goes – there’s no difference. You each have your own card that you can use separately. Each month you will get a combined statement that will include both your mom’s purchases and yours. The credit card company has no idea who bought what, and they don’t care either. Your mom will pay the statement, and the payment information will register both on your mom’s credit report as well as on yours.

This way you are piggybacking on your mom’s credit card. It legal and the credit bureaus acknowledge it between husband, wife and kids.

Your mom’s good credit in itself doesn’t help you. It only means that she’s probably never late on payments. This is good because if she doesn’t pay the statements on time – she will ruin your credit as well.

The only difference between being an authorized user to a joint user is your liability to pay in case that your mother doesn’t pay.

An authorized user can be added without him/her signing, and is not liable to pay the account. A joint user must be signed to the account and in case that the other user defaults – the joint user is required to pay the account.

Once again, as far as building credit history goes – it makes no difference. Both ways are excellent to build good credit for you.

[Author]

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