This week’s blog is on “credit education”. But more than that, we are focusing on how important it is that our young people understand the gravity of credit in their lives.
The video above is an effort to give us perspective. If you haven’t already, go ahead and watch it now. Then come back!
Parents have a lot of responsibility in raising kids right? We talk to our kids about the importance of making good choices, showing integrity and choosing good relationships – just to name a few. So what about the importance of credit? Most folks skip over that one. But why?
Having knowledge of how credit works can be instrumental in the lives of young people.
It takes much less effort to ruin trust than it does to gain it.
Everyone who’s had a credit card probably agrees with that statement at some level.
So why give our young people the responsibly of learning on their own? If you don’t teach them who will? As we’ve learned in our video… schools don’t teach credit, much less finance.
It’s left up to us!
2 Tips to Jump Start Your Kid’s Credit Profile
- Explain what “credit” is, and what it is not.
Not sure where to start? No problem. There are a number of blogs to help you, including The 3 Credit Bureaus.
- At age 18, you can help your kids jump start their credit profile.
You can do this by adding your kids or immediate relative as an Authorized User on your credit card. The credit card company will report your entire credit history (of that account) onto the Authorized User’s credit report. This is a fantastic way to help your kids or spouse start to build credit. To be clear, this is not a co-sign. In essence, the Authorized User is inheriting any history on that account, and the primary card holder’s credit is not effected, or in jeopardy. You don’t even need to issue the Authorized User a card of their own for this to work.
Read more about Authorized Users here —–> Length of Credit History
Credit cards that support Authorized Users:
|Issuer||Reports Authorized User Activity to Credit Bureaus?|
|American Express||Yes (all three bureaus)|
|Bank of America||Yes (all three bureaus)|
|Barclaycard||Yes (TransUnion and Equifax)|
|Capital One||Yes (all three bureaus)|
|Chase||Yes (all three bureaus)|
|Citi||Yes (all three bureaus)|
|Discover||Yes (all three bureaus); report looks different from that of primary account holder|
|US Bank||Yes (all three bureaus); report looks different from that of primary account holder|
|Wells Fargo||Yes (all three bureaus)|
Let’s teach our young people how to be credit wise. Having a healthy credit profile can save thousands of dollars and provide future security. Let’s be good stuarts of it.
Stay thirsty my friends.