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Sandra Gilpatrick, CFP ®,CDFA™

Building Credit for Kids

Building Credit for Kids


Many people dive into the world of building a credit score at the age of 18. Your credit score is what helps lenders asses your repayment risk. A higher score will give you the best opportunities for lower interest rates when you need to borrow money. A good credit score is also important as future employers or even landlords often check your credit when they consider you as a candidate.  A factor in score is length of credit history, impacting the ability for a lender to make a decision on whether you are deemed trustworthy.

This can pose a problem to those who need a loan at a young age, and especially students who will be heading into higher education, as this major life step will come with the accumulation of student loans. Most banks and credit unions start offering credit cards at 18 years with demonstrated income, and some banks will offer a student credit card at age 16, assuming they have income to support the card.

But what if there was a way that, as a parent, you could begin to build your child’s credit report years before the age of 18? Yes, it is possible!

I have explored this possibility with my own son, who is 11 years old. I added my son as an authorized user to my credit card. Some may think this seems precarious - but on the contrary, it allows a child to learn about budgeting and fiscal responsibility early, while also starting to build a credit report at a young age. Every month, my son receives a monthly allowance of $20 from completing his chores. He decides how to spend (or save) it, but he knows he has a limit that is not to be exceeded.

It should be noted that you do not have to start this with your own child at age 11-  if you do not think that your child is responsible enough yet, wait to share the privilege. My son has been saving for a house since age 4, earned money as an entrepreneur, and demonstrated his understanding of budgeting. He has a track record of being smart with his money. You may want to test your child first; as it’s a responsibility you will ultimately bear to pay your credit card bill.

Motivated by the desire to save other parents some legwork, I wanted to share my findings after spending hours visiting and calling banks near my office. While conducting this research I was told by many of the bank personnel, I was the first parent many had seen asking for a credit card for their 11 year old; so my guess is many parents have not considered this avenue.

After trying many other banks, I decided to call my own credit card company:

  • As an authorized user by Citibank his social security number is attached to the profile, which starts to slowly build credit. Important to note, not all banks will attach your child's social security number and help build a credit report. You need to call and specifically ask. There was an authorization form I needed to mail to release my son's social security number to the bank.
  • A co-signed credit card would have been a stronger way to build credit, but those cards were not available after checking a dozen banks.
  • You have the possibility of considering a secured card around the age of 18. This is where funds are collateralized from your child's bank account. Citibank has a secured card that starts with $200 and increases in increments to $2500. After 18 months of responsibly using the secured card, the bank evaluates performance and could upgrade to their regular credit card.

 Starting a good credit history earlier on is a boost in life for my son. It should also be noted that when trying to decide if this is a good option, the positives are outweighed the negative implication. By starting a credit history, I would have to start monitoring his credit history earlier, as it can open him to identity theft/fraud. Annually checking is a free tool to help be on top of your credit.

Another good resource for those looking to maintain and track a credit score is This free site can also help filter cards by your credit score, low interest rates and no annual fee cards.