Have Kids? Start Their Credit Now and Help Their Future
One of the most fortunate thing that has happened in my life (rather unintentionally) was that I was added as an authorized user on one of my dad’s accounts. I was probably 16 at the time and had no idea how credit worked. Little did I know, this move launched me forward with great credit history.
Frankly, a lot of adults do not fully understand all the pieces involved that calculate your credit score.
One of the heavy hitters of this dubious formula is the average age of credit accounts and payment history. In simple terms, starting your credit as early as possible is most advantageous for your credit future.
If you, as a parent, are responsible with credit… adding your child to one of your credit cards would be one of the simplest ways to help start building their credit before they can start on their own. This would essentially put them ahead of the game when it is time they open credit cards on their own or apply for low-interest auto loans or even college loans.
If you have a teen, this is could be a great tool for education. Teaching your child how credit works and how to be responsible for it.
Note: An authorized user's credit only gets impacted when providing social security numbers. Some banks do not ask for this and in return do not report to credit agencies. Thus, allowing you to add your dog as an authorized user (True story: my dog has a Chase Sapphire credit card with his name on it). So, if you are looking to build someone’s credit, add them on to a card that asks for their social.
Looking forward to seeing your child as a future (responsible) Mileaholic!