Dear Opening Credits,

I am a 24-year-old graduate student with no  credit history and no student loans. However, I have applied for a credit card two times with Chase and have been rejected both times. I thought that I  didn’t need a credit card,but I am realizing now that with no credit history, I  can’t seem to do anything. I’m worried and would really like to start building  credit. I have a sister who is willing to co-signor also open a dual (?) credit card. Please help!!! Thank you.

Wow! You’ve made it through your undergraduate studies and on into a graduate  program free of student loans and consumer debt? What a terrific position to be  in! Yes, terrific, even though you’ve been denied access to a credit card. All too many students exit the  university system overloaded with liabilities, and then have a hard time finding  a job to pay them all back, so you’re doing pretty well comparatively.

It’s true that a good credit history will help you do all sorts of things,  including getting those cards that you’d like to own. So how do you get started?  The first way, as you mentioned, is for your sister to co-sign on an account. If she does, she is guaranteeing that  if anything goes wrong and you don’t pay your bills, the credit card company has  the right to turn to her as well as you for repayment.Also be aware that the  credit activity will appear on both of your credit reports. So if either of you  run up high balances, make late payments or allow the account to go into  collections, both of your credit ratings will suffer.

Because so many problems can erupt, I’d steer clear  of a co-signed arrangement unless you are absolutely sure that you  and your sister will use that joint credit card responsibly. Communication is  also essential. Keep each other abreast of new charges, know who will be the  account manager, and if anything does go wrong and you can’t make a payment,  call her immediately to work something out.

The other method to get credit is with a secured credit card. These are really great for people like  you, who don’t have an established credit history with which to impress a credit  card company. To get a secured card, you would apply with an issuer that offers  them and be able to put down a small amount of money to guarantee the account.  Upon approval, that cash will be held as security, and they will grant you a  credit line that matches your deposit or a bit more. If you fail to pay what you  owe, the credit issuer can claim the funds that they are holding for you.  Because of this, they assume very little risk in handing you a card, so they’re pretty easy to qualify for.

Whichever way you obtain your first card, it is very  important that you use it correctly. Charge a few times a month, pay on time and  in full. After a year or so, you’ll be in a far better position than you are  today. If you got a card with the help of your generous and trusting sister, ask  the issuer if she can be removed from it so the account is just in your name.  Or, if you went the secured card route, apply for an unsecured card — your  credit history should be good enough to woo them. Keeping the secured card  active will boost your credit score, but you may want to close it and get your  deposit back if they’re assessing an expensive annual fee.