How Young Is Too Young to Start Building Credit?


Worrying about a child’s health or safety is part of being a parent. But since FICO scores have so much influence on our financial futures, many of today’s moms and dads are fretting about their kids’ credit too.So how soon is too soon to start helping your child build credit? The answer might surprise you.

You can start building your child’s credit today

You can start building your child’s credit whenever you want to by making him or her an authorized user on your credit card. Usually, you have to be at least 18 to take on a credit card or loan, which are the conventional ways that people start building credit. But authorized usership is a little different. In many cases, issuers don’t set an age minimum for authorized users, because they’re not responsible for any of the bills.

By using your plastic responsibly, your child will benefit from the good credit history you’re creating. You don’t even have to give your child a card until you feel he or she is ready for the responsibility; simply being the authorized user on paper is enough to do the trick. It won’t have the same credit-building power as being the primary user on an account, but it’s a good start.

If you think it’s overkill to make your toddler an authorized user on your card, there are other opportunities to help when your child is a little older — and they’ll pack more punch than authorized usership too. For instance, you can co-sign his or her first credit card, which may be a necessity if your child is a full-time college student (as opposed to fully employed in the workforce) at the age of 18. You could also co-sign a car loan or student loan.

How to know when your child is credit ready

Parents know their children’s strengths and limitations, so let your gut guide you in deciding when to give your child a credit card of his or her own. For some, this comes when kids start driving, or getting to and from school on their own. Most moms and dads want their kids to have an emergency way to pay if disaster strikes. For others, this comes as late as college, when co-signing a credit product makes more sense.

If you’re still unsure, here are a few signs your child might be ready for a card of his or her own:

He demonstrates an interest in building credit.

She demonstrates an ability to budget, save and spend money wisely.

She knows the basics of money management, and can clearly explain how credit cards work.

He is honest about money and is willing to ask questions when he doesn’t understand something about it.

She shows maturity in other ways, including an ability to control impulses and delay gratification.

Professional Consultants at Coast to Coast Credit Services, Inc. can answer all your questions and offer you a “Free” evaluation of your current credit situation.  Call today at:  888-292-2525’

Article courtesy of Credit .com