Jean Chatzky
Building a good credit score can be tough for college students—many of whom don't know the ins and outs of financial responsibly. Jean talks with Jonathan Clements, personal finance columnist for The Wall Street Journal, about a few tricks he used to get his college-aged daughter's credit history on the right path.

Jonathan says that his daughter—a freshman with no credit history—did not qualify for credit cards on her own. "I thought maybe she should have a credit card—not because I want her to have credit card but because I want her to build up a good credit score, and one of the most valuable things you can have in life is a [good] credit score," he says.

Here are some ways that Jonathan says you can help your child build good credit:

Make your child a joint account holder on your credit card. Jonathan says his daughter is a joint account holder on a credit card with him and is equally responsible for the debt incurred on the card. However, Jonathan says the trick to this is to not give your child the card. "She still gets the benefit of the credit history, whether she uses the card or not," he says. "I figure I will wait a couple of months until we have had the card jointly together and then I am going to have her apply alone and get her own card, and then she will be solely responsible for the debt."

Teach your child how to use a credit card to build a good credit score. Instead of using a credit card as supplemental income, Jonathan says you should teach your child to use it as a tool that builds their credit score. "Charge a nominal sum every month, pay it off on time and keep doing it at that rate," he says. "If you do that for a couple of years you will have a great credit score."

Buy your child a new or used car and make them a cosigner on the loan. "You are giving the kid the car anyway—you know you are going to make the loan payment—so just by adding the kid as a cosigner on the auto loan there is really no sort of risk to you," he says. "By having the kid cosign the loan, you generate a credit history for the child because they will benefit from the regular payments you will make on that loan."
The information provided here is general advice and you should always consult your own financial adviser before making major financial decisions, including investments or changes to your portfolio. The opinions expressed by the hosts, guests and callers to Oprah Radio are strictly their own.


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