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Youre an adult.
You understand the pitfalls and promises of the credit world.
Depending on how you use it, credit can be an incredible blessing or a hellacious curse.
Youve been through it.
But you know who doesnt have all these valuable lessons in their back pocket?
Teaching your child about credit is your duty to sculpt a functioning member of society.
It will help them to be approved for loans, housing, and financial independence.
Lets take a look at how to build credit for your child and why its important.
It can impact insurance rates, renting an apartment and even job offers in certain industries.
By helping your child start early, youre giving them:
And honestly?
Itll save them from learning through costly mistakes later.
And few things are more important to their finances than the concept of credit.
Discuss with them the importance of paying bills on time andkeeping debt low.
Learning to spend less than you make is a discipline that needs to be learned.
This is something worth checking before you begin building their credit.
Give them savings goals, and show them the satisfaction that comes with purchasing delayed gratification.
Theyll learn about managing deposits, withdrawals and budgeting.
Its worth noting there many banks and financial apps specialize in educating kids about money.
They offer debit cards that can be regulated by parents.
How It Works:
You add your child to your credit card as an authorized user.
They dont need to have spending access but theyll start building credit history based on your account.
Just double-check:
Its a simple, low-risk way to give thema credit historybefore theyve even graduated high school.
What Is It?
Many community banks andcredit unionsoffer these, and theyre made specifically forfirst-time borrowers.
Think of yourself as their credit coach not just a cosigner or cardholder.
When Can You Start Building Credit for Your Child?
you’re free to start laying the groundwork (like education and savings) as young aselementary school.
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