Helping Your Child Build Credit: Why You Should Start Early

One of the greatest financial gifts you can give your child is a strong financial foundation. Establishing healthy credit habits early can make it easier to rent an apartment, finance a vehicle, qualify for a mortgage, and even secure certain jobs later in life.

Here’s a simple roadmap many financial advisors recommend:

• Birth–15: Keep your child’s credit frozen to protect against identity theft.
• Ages 16–17: Consider adding your child as an authorized user on a well-managed credit card to begin building credit.
• Age 18+: Help them open a student or secured credit card in their own name, encourage them to pay the balance in full each month, and continue teaching responsible credit habits.

1. Add Your Teen as an Authorized User

If you have a credit card with a long history of on-time payments and low balances, adding your teen as an authorized user can help them begin building credit.

Before doing so:

• Confirm your credit card issuer reports authorized users to the major credit bureaus.
• Continue making on-time payments.
• Keep your credit utilization low.
• Teach responsible credit habits.

2. Consider a Student or Secured Credit Card

Once your child turns 18, they may be ready for their first credit card.

A student credit card is designed for individuals with little or no credit history, while a secured credit card can be a great alternative if they don’t yet qualify for a traditional card.

The most important lesson? Pay the balance in full every month and avoid carrying unnecessary debt.

3. Protect Their Credit Along the Way

Building credit is important, but so is protecting it.

If your child is under 16, consider placing a free credit freeze with each of the three major credit bureaus. A credit freeze helps prevent identity thieves from opening fraudulent accounts in your child’s name.

Good Habits Last a Lifetime

Helping your child build credit isn’t about encouraging them to borrow money, it’s about preparing them for the future. By introducing good credit habits early and protecting their identity along the way, you can help set them up for financial success for years to come.

Quick Tips for Parents:

• Freeze your child’s credit until they’re ready to use it.
• Add them as an authorized user when they’re ready (if appropriate).
• Encourage them to pay every balance in full.
• Keep credit utilization low.
• Teach them to use credit as a tool, not a source of debt.

Contact BNA Today

If you’re a business owner looking for reliable financial guidance, we’re just a call away. Reach out to us at (803) 366-8371 or email us at success@bnacpa.com to see how we can support your goals.

BNA: Smarter Finances, Mastering Wealth Management