A Guide To Your Child’s Credit Report: Pros and Cons

Half of the ten major credit card issuers allow minors as authorized users with no minimum age. So a child under 13 years old can be an authorized user. Is that too young? Unfortunately, it is not too young to be a victim of identity theft.

Technically, credit reports can be started for children of any age if authorized users of a parent’s credit card. Most major credit card companies will allow you to add your teen as an authorized user and impose a minimum age. Some companies do not have minimum age limits at all.


The Pros

Having a good credit score at an early age is a good strategy. Parents increasingly are making their children authorized users of their cards. Authorized users piggyback on the credit of the parent but are not responsible for paying the bill. There may be some fees to pay for this benefit.


The Cons

Being an authorized card user of a parent’s card with not such a great credit score could expose your user to a bad start in credit. A parent’s late payment will impact not only their score but their offspring’s as well.

Identity Theft Is High For Young People

Teens are open creatures, sharing personal information online with numerous “friends” on Instagram, Snapchat, WhatsApp, and Facebook. They use public Wi-Fi and frequently misplace their phones. Teens under age 18 are twice as likely as their parents to be victims of identity theft and fraud. Their credit report is like blank slates.

Alternatives to authorizing your young user?

Secured cards are an interim step, like putting a child on credit training wheels and allowing them to spend wisely and within limits based on the amount on the card. Secured cards can help you build credit, unlike debit cards.

Children under the age of 18 years cannot enter into valid contracts. Explain that your child is a minor and, as such, cannot enter into legal contracts. At most, the contract is voidable, and the minor has the option to void it.

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