Building Credit for your Kids (give their FICO score a boost at an early age)

June 05, 2022 4 min read


The Money Bag Newsletter by Financial Footwork


Building Credit for your Kids (give their FICO score a boost at an early age)

Credit is king in the real world and you can start helping your kids build credit as early as 14! 

We all know how important credit is, and every parent I talk to wants to give their kids a leg up in the world of money. Building credit young can do just that!  


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I am going to walk you through 3 ways you can help your kids build credit responsibly and put good credit practices into place at a young age. 


1 : Authorized User Accounts

An authorized user account is a secondary account provided to another person that is linked or attached to your credit card. You’re responsible for the payments and allow the individual access to your credit line. As the parent, just remember; you will need to keep a close eye on how your account is running when you authorize a user to your credit card. 

How it works:

You can add your child as an authorized user to your existing credit account, starting as early as 14 depending on your bank/creditor. Using your credit activity, you will help them start building a credit profile based on your credit usage, that happens once they are added as a user. Previous history is not counted for them.

Pro Tip: Remember that your credit habits will directly impact them so make sure your credit is solid before executing an authorized user account. 

With an authorized user account you have two options:


Add your child to the card anddo notprovide them with a physical credit card. Simply use your card regularly, no charges to your spending or purchase habits and after 6-12 months your child will reap the benefit of your credit history.  This will slowly start building a credit history and score. The longer you have your child authorized as a user on your card, the more time their credit profile will have to develop and the better their score will be. 

Now this all assumes that you are using credit correctly! 


Provide them with a credit card of their own with a small limit. $250-$500, and allow them to use it for small purchases. You will have to motion this closing to make sure it is not maxed out, and it is paid off each month In full and on time. Giving your child access to a small credit limit and building those positive spending and payment habits at a young age will carry with them moving forward. 

*Caution:* If you do not have a good credit score or have issues with credit, this is not a good option for building your child’s credit score. I will give you a couple options later in the video to assist them.  


2. Secured credit card 

Secured credit cards are a unique and beneficial tool for building credit. When you apply for a secured credit card, you are using cash to secure the card and take the risk away from the creditor. If you don’t pay your bill, they use the cash you put down to pay off the balance on the card. 

Let me give you a real example so you can see how secured credit cards work :

Step 1: You apply for a secured credit card. 

Step 2: The company will ask you for a cash deposit for the card. 

Step 3: That cash deposit will be your credit line, how much money you have access to on your credit card. 

If you apply for a $500 secure credit card. You will receive a credit card with a $500 limit. You can spend up to that limit monthly and pay it off, repeating this cycle every month. 


Do not max out your credit card limit, this will actually hurt your score. For more tips on how to use credit to improve your credit score, see our 5 tips for improving your credit score video.

Secured credit cards are afantasticway to build credit for anyone at any age, for kids it’s a tool to learn how to use credit month-to-month while building their individual credit score. 


3. Traditional credit cards 

Once your child is 18 they can apply for a traditional credit card. This will be an unsecured line of credit, with a lot more freedom than the other two options in terms of spending and credit limit access. This was also the way that I started building credit at 18! For the whole story on how I had over an 800 credit score by the age of 21, check out the video I've linked in description. 

Traditional credit cards are one of the most commonly used techniques to build credit. Once your child is a legal adult they can apply on their own. If your child already has an established relationship with a bank (checking or savings account) that will be the best option when applying for a credit card. Banks are like creditors, they actually look at how you interact, if you have good habits and if you overdraw your account. 

If you have a strong banking relationship, this goes for anyone at any age, it will be easier to get a credit card as you’ve shown you are able to handle it through your relationship with the bank.  Good banking habits can go a long way when you are starting the process of building credit, as your bank will want to continue their relationship with you.. 

If you want to help your kids get a leg up with their money game, use any of these 3 credit tools to help them start building credit today! 

Like what you heard? Smash that subscribe button and start getting your finances with our 12 week financial training program in the description. Take control of your money and help your kids do the same–the link is in our bio. 

Now let’s get to that 800 credit score.


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