{"id":8922,"date":"2024-12-03T06:56:03","date_gmt":"2024-12-03T06:56:03","guid":{"rendered":"https:\/\/finderica.com\/here-how-parents-can-help-boost-their-kids-credit-score\/"},"modified":"2024-12-03T06:56:03","modified_gmt":"2024-12-03T06:56:03","slug":"here-how-parents-can-help-boost-their-kids-credit-score","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=8922","title":{"rendered":"Here how parents can help boost their kids’ credit score"},"content":{"rendered":"
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Images By Tang Ming Tung | Digitalvision | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Parents who want to help jumpstart their kid’s credit score and credit history can take one fairly easy step, money experts say: Add your child as an authorized user to your credit card account.<\/p>\n

The goal is to have a child build credit from a relatively early age by piggybacking off their parent’s \u2014 i.e., the primary account holder’s \u2014 good credit.<\/p>\n

The strategy is generally best for kids in their later teenage years, maybe around 16 years old, or even those in their early 20s, said Ted Rossman, a senior industry analyst at CreditCards.com.<\/p>\n<\/div>\n

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Parents can think of it as a “stepping stone” to building credit, he said.<\/p>\n

“It’s gotten harder to establish credit in your own name, and this is one of the tools to get around that,” said Rossman. “It can really help a lot.”<\/p>\n

Allowing kids to use a credit card \u2014 and showing them how to pay off the debt responsibly \u2014 can also “help them learn healthy credit card management skills early on,” said Andrea Woroch, a consumer finance expert.<\/p>\n<\/div>\n

<\/a>Why building credit is important<\/h2>\n

<\/a>Things to consider<\/h2>\n
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Mihailomilovanovic | E+ | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Parents should only try this authorized user strategy if they themselves have good credit, experts said.<\/p>\n

“As long as you pay your bill on time and don’t carry a hefty balance each month, your child will benefit from your positive credit history and credit score, helping them to establish and build credit,” Woroch said.<\/p>\n

They should also ideally have an end date in mind.<\/p>\n

Perhaps for one to three years, depending on the circumstances, Rossman explained.<\/p>\n

Importantly, this would not be a joint account. <\/strong>Legally, the primary accountholder is responsible for all the authorized user’s transactions \u2014 meaning a parent is on the hook if their kid misuses a credit card, perhaps by overspending or failing to pay their bill on time and in full each month, he said.<\/p>\n<\/div>\n

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Parents can set spending limits for authorized users, depending on their card provider, experts said. <\/p>\n

That means setting a relatively low credit allowance, maybe just enough for the teen to fill up their car’s gasoline tank or go to the movies a few times each month, they said.<\/p>\n

Parents don’t even have to give the card to their kids at all.<\/p>\n

“The credit benefits actually translate whether they use the card or not,” Rossman said.<\/p>\n

Ultimately, parents should make sure they “set clear rules and boundaries as to if and how they can use the card,” Woroch said.<\/p>\n<\/div>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Images By Tang Ming Tung | Digitalvision | Getty Images Parents who want to help jumpstart their kid’s credit score and credit history can take one fairly easy step, money experts say: Add your child as an authorized user to your credit card account. The goal is to have a child build credit from a<\/p>\n","protected":false},"author":1,"featured_media":8923,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[247,238,1240,1012,976],"class_list":{"0":"post-8922","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-boost","9":"tag-credit","10":"tag-kids","11":"tag-parents","12":"tag-score"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/8922","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8922"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/8922\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/8923"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8922"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8922"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8922"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}