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

There are different age milestones for getting your own credit card. Typically, you must be at least 18 years to apply for a credit card.

The Credit Card Accountability Responsibility and Disclosure Act of 2009, the CARD Act, has made it more difficult.

If you are between 18-21 years old, you need to prove you are able to pay your card bill through a show of income from a job, grants, and scholarships.

How early can a minor have a credit report?

Technically, credit reports can be started for children of any age if they are authorized users of their parents’s credit cards.

Most major credit card companies will allow you to add your teen as an authorized user and may impose a minimum age. Some companies do not have minimum age limits at all.

As parents you need to make sure your young child is responsible with using the card. You can set spending limits or get alerts when purchases are made.

Having a good credit score at an early age is a good strategy

Make sure your children communicate with you about their spending activity. Also, discuss the rules about not sharing their cards with others. As they go away to college, you want them to be comfortable with using their cards.

There are downside factors though

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. Not all credit card companies view the authorized user as responsible for the loan and your young user is not getting well, credit.

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