Building credit is one of the most important things your children can do in their financial lives, and it’s best to start right when they turn 18. An early start will give them a long, reliable credit history by the time they want to get an auto loan or mortgage.

 In this post, we’ll walk through ways you can help them build a good credit score and be ready for future loans.

 Q: Can I use my credit card to help my children?

 A: Yes! You can add your children as authorized signers on the card to help them build credit. This means whatever you do with the card (credit utilization, balances paid off, etc.) affects their credit, too.

 That makes it all the more important to have a good credit score and low utilization rate on your card. Good credit practices will give your children a good report right away. On the other hand, adding them to a credit score in need of improvement will hurt more than it will help.

 Q: Are there any ways the credit union can help them build credit?

 A: Once again, yes! Allied offers credit builder loans designed to help people build credit, and your children can get these loans once they turn 18.

 With a credit builder loan, your children borrow $1,000 with a 12-month payback term. Your children build credit as they pay off the loan, and once it’s completely paid off, they keep the $1,000 in their savings accounts.

 These loans also:

·       Require no down payment

·       Have all applications approved

·       Establish a good relationship with the credit union

 Q: What else can my children do to build credit?

 A: Pay bills on time and use credit cards responsibly. If your children already have their own bills, it’s important they avoid late payments. Companies don’t usually report late bills to credit bureaus, but they could wind up on your children’s reports if their accounts get sent to collections.

 Also, your children’s new credit cards could be curses if they don’t use them correctly. Amassing credit card debt or missing payments could damage their scores right as they start their financial journeys.

 We hope this post gives you a good place to start helping your children build good credit histories. Of course, we’re here to help them as well.

 If they would like to get started on a credit builder loan, they can apply here.