It’s never too early to teach your child good money habits. How your child sees money at a young age can shape their perspective about it as they enter the workforce and make important financial decisions. With the help and advice from credit specialists, you can start building your child’s credit as early as when they are in high school or even earlier. Here are some of the top strategies to consider.
Help Your Child Understand The Importance Of Saving Money
Building credit isn’t possible if you don’t have enough money to make loan payments or pay a credit card bill. That’s why stressing the importance of saving money is crucial for how kids perceive money. A positive strategy credit specialists promote is providing incentives for your child to save money. For example, you could match every dollar they save up to a certain amount each month so their money can grow faster.
Add Your Child As An Authorized User
Once your child is old enough to understand responsible spending, adding them as an authorized user to your credit card can be a great credit-building strategy. As long as you make payments on time and keep your credit utilization low, your child will slowly build a positive credit history.
Sign Up For A Secured Credit Card
Signing up for a regular credit card might not be possible until your child becomes a teenager. But in the meantime, credit repair experts suggest pursuing secured credit cards. The qualifications aren’t as stringent and they allow you to deposit money in the account to serve as your child’s credit limit. A secured credit card is a valuable option to consider if you would prefer not to have your child as an authorized user on your primary credit card.
Sign Up For A Credit Builder Loan
Credit builder loans are popular options that credit repair experts suggest. Your child must be 18 years old or older to obtain one, but the purpose is to provide a loan to people with no credit. Cosigners are not necessary, but they do have higher interest rates and fees. The benefit is your child can build their credit by making timely payments and potentially get better rates when they are an adult and need loans on larger items, like a mortgage.
At Core Credit Solutions, we can help fix your credit in Los Angeles. We love talking to parents who want advice on how to help their children develop positive money habits. We are here to help in any way we can, so contact us today to learn more about our services.