HOW TO BUILD YOUR CHILD'S CREDIT (2024)

FAQs

HOW TO BUILD YOUR CHILD'S CREDIT? ›

If you're interested in building your child's credit before they turn 18, you can explore adding them as an authorized user to one or more of your credit cards. There is no legal minimum age for adding a child as an authorized user, however you should check your credit card issuer's policies.

If you're interested in building your child's credit before they turn 18, you can explore adding them as an authorized user to one or more of your credit cards. There is no legal minimum age for adding a child as an authorized user, however you should check your credit card issuer's policies.

Consider authorized users on your credit card

Adding your teen as an authorized user on your own credit card may be a way for them to learn how credit works and how to use it responsibly. In addition, this could help them build their credit history.

Because people under age 18 can't open their own credit cards, you can't technically open a whole new credit card in your child's name — but you can still add them to yours. Adding someone to your account turns them into an authorized user, which gives them many of the same perks you have as the primary cardholder.

According to the Federal Trade Commission, information like a child's Social Security number, birth date or other personal identifying information can be used to open bank and utility accounts as well as apply for credit cards, loans and government benefits.

As an authorized user, your credit card will build your kids' credit history. The credit card usage and payment history will be added to their credit profile. This will help them when it comes time to apply for their own credit card or other types of credit.

When you add an authorized user to your credit card account, information from the account — like the credit limit, payment history and card balance — can show up on that person's credit reports. That means their credit can improve as a result of being added to a credit account you keep in good standing.

For another, kids don't actually inherit your credit score, based on your presumably long credit history. They only get the benefit of that one account. It will take them about six months to start compiling a credit score of their own. Most important, kids don't need your help to get credit.

Credit bureaus do not combine credit scores. The only way your parent's bad credit habit can affect you is only if you have a joint account with them which is unpaid or you guaranteed a loan which has become delinquency.

Does Greenlight help kids build credit? ›

When your teens are ready to buy a car or rent an apartment, good credit unlocks better interest rates, lower monthly payments, and more opportunities. With Greenlight's family credit card, teens start building credit before they turn 18.

Citibank, Chase, Bank of America, and Wells Fargo don't have a stated minimum age. By becoming authorized users, teens start to learn responsibility and benefit from the credit history of the card's owner. If your credit score is low, it's worth building it up before adding your child as an authorized user.

Whether your child is off to college or living at home, make sure they can access funds when needed. When you add a child as an Authorized User you can keep track of their spending in real time. Enable instant purchase notifications and receive real-time alerts through the Capital One mobile app.

1. Contact the three credit bureaus. The credit reporting agencies do not knowingly maintain credit files on minor children. You can find out if your child may be a victim of identity theft by contacting the three major credit bureaus.

Prevention Steps

Only provide a child's social security number when absolutely necessary. Shred papers with personal information before discarding. Keep birth certificates, social security cards and other sensitive personal information securely locked away.

That includes “borrowing” a child's identity to obtain credit or something else in their name. This is actually a type of fraud, although many parents may not think of it this way. It's largely a crime of opportunity.

A child generally only needs to be 13 to 15 years old to qualify as an authorized user and start building credit, while some card issuers have no minimum age requirement at all (read about the minimum ages for each card issuer).

As we mentioned, a child can't open a credit account independently, but you may be wondering, “Can I add my child to my credit card?” Yes, a parent can add their child as an authorized user on a credit card, given the child meets the credit card issuer's minimum requirements.

Just like a checking or a savings account, a child cannot have a credit card in their own name before the age of 18. However, they can become authorized users on their parent's or guardian's credit card. The age at which that is allowable depends on the credit card issuer.

As a legal guardian, you can request a free copy of your child's credit report by completing the request form on annualcreditreport.com . This will help you access one free credit report per year from each of the three credit reporting agencies: Equifax, Experian, and TransUnion.