How You Can Help Your 18 Year Old Build Good Credit

Your children becoming financially independent can be exciting, but can be challenging too. Helping your children build great credit early in life will be beneficial when facing financial realities in the future like purchasing a car, home, or applying for a loan.

Here are some tips to help your children build great credit at 18:

  1. Always pay bills on time (set up calendar reminders on their phone) –

    The most important factor of your FICO credit score is your payment history. Don’t let late payments bring their score down. Of course, we are all human, and things happen so if they happen to be late on a payment they should call their lender and see if they will be willing to waive it. Setting up auto payments could also be beneficial in case they are forgetful.

  2. Get a secured credit card –

    Make sure they are spending on their credit cards (and of course paying them on time), as it is so important to their credit score. A secured credit card will help build their great credit and because it is prepaid they can ensure that they aren’t abusing it or overspending what they don’t have.

  3. Make payments to their student loans while in school –

    While in college your child is not required to make payments on their student loans but your child doing so will help them get ahead on the loan and pay it off earlier. This will also reduce debt when they have added expenses in the future.

  4. Make them an authorized user on your credit card –

    If you have good spending habits and good credit, consider making your child an authorized user on your credit card. Don’t necessarily allow them to use your credit card but doing this will allow your good credit history and length to reflect on their credit also.

  5. Check your credit score every 6 months –

    Trust the process, it takes time. Checking your credit score too often can cause unnecessary stress. Limit checking your credit score to every 6 months. It’s also good to avoid a “hard” credit pull.

  6. Never spend more money than you have –

    Spending more money than they have will only get them further and further behind the next month making it harder to catch up. Only spend the money you can afford to pay back to avoid stacking debt and in case of an emergency later on.

  7. Show consistency –

    Lenders look closely at how consistent you are with payment history and how old your accounts are. To make borrowing money a breeze in the future it’s best to be consistent early on.

Let our credit experts know how we can help you!