As a credit restoration firm, one of the questions we get from our clients most frequently is how to set children up with good credit. We love this question, as it is much better to be proactive about credit now than to wonder how to fix bad credit later down the road.

Educate Your Children

The first step to good credit is simple: education. It’s much harder to have good credit when you have no idea what factors go into a credit score in the first place. The problem with this strategy is that many adults themselves do not necessarily understand the complexities of credit.

We might know the basic principles of paying bills on time and not using more than 30 percent of a credit line, but we don’t always know much more than that.

The importance of education is one of the reasons My Credit Guy started our video blogs in the first place. We believe that educated clients make better choices, and that it helps when financial concepts are explained in an easy-to-understand fashion.

Check out our blogs on topics such as how to increase credit score, the basics of co-signing, and credit behaviors to avoid. The first step to educating your child is educating yourself.

Similarly, you want to make sure you are a good example of positive credit for your children. The next time you make a credit card payment, have your kid sit alongside to see you do it. If you’re at the bank, use that time to talk about credit, lenders, and other key financial concepts.

Establish Your Child As an Authorized Payer

In addition to teaching your children the details of good credit, a concrete strategy involves co-signing or having your kid as an authorized user on your credit card. Indeed, the length of credit history is a primary factor of credit score. So, the longer your child has positive credit, the better their credit will be.

Say you were going to buy a car for your high schooler or college student. You should add them to the loan as a co-signer, if the bank allows it, so they can build credit as you all work to pay off the car. The same goes for a credit card, where you can authorize your child as a user.

The danger here is that you can hurt your child as much as you can help them, so be sure that you pay these accounts on time. Re-familiarize yourself with co-signing before you embark on this path to be extra sure that you are setting your child up for success — not a life of poor credit!

My Credit Guy

If you have any questions about your own credit score or the best ways to support your family, feel free to contact our team today. My Credit Guy offers free consultations and credit reviews, but we also firmly believe that education is a primary service as well. We are happy to speak with you!

Contact My Credit Guy today to speak with our credit restoration company.