“Add your little one as a certified consumer so you possibly can assist them set up a great credit score historical past.” It’s widespread recommendation — and it’s not improper. Assuming you’ve got a superb credit score historical past your self, in addition to flawless credit score habits, you can provide your little one a credit score enhance by including them to your bank card account.
As they are saying, although, the satan is within the particulars.
Certain, you can add Junior to your playing cards when he’s a toddler, however is that serving to him? Or are you probably opening the door to fraud with out giving him any actual profit? Are you seeding an enviable credit score historical past that may support him in securing credit score when he’s an grownup? Or are you prematurely introducing complicated cash ideas earlier than he’s sufficiently old to know and take part?
Let’s clear up the murkiness round the best time so as to add your kids as licensed customers and tackle how your determination impacts them each immediately and properly into the long run.
When does a toddler begin constructing credit score historical past?
One thing triggers the beginning of your credit score historical past — it doesn’t magically materialize in your 18th birthday. In reality, about 28 million People lack a standard credit score historical past, that means they’re credit score invisible, in keeping with a 2022 Experian report.
“Bank cards are sometimes one of many extra widespread types of accounts we see [to start credit histories],” says Margaret Poe, head of shopper credit score schooling for TransUnion, one of many three main credit score bureaus. “Pupil loans are [also] typically an early account on folks’s credit score report.”
Whereas these are typical accounts for adults, there are additionally a handful of causes a toddler could have a credit score file.
Being added as a certified consumer on their dad and mom’ bank card is an everyday — and even useful — exercise that initiates a toddler’s credit score historical past. “Usually a toddler received’t have credit score. They received’t have any form of credit score account, so that they received’t have any form of credit score historical past,” explains Poe.
Nevertheless, it’s not the one manner kids discover themselves with credit score histories lengthy earlier than they want them.
One of many large causes a toddler may need a credit score historical past is as a result of they’re a sufferer of fraud.
— Margaret Poe
Head of shopper credit score schooling, TransUnion
One in 19 kids has been a sufferer of identification fraud prior to now six years, and 1 in 116 has been victimized inside the previous 12 months, in keeping with a 2024 report from Javelin Technique & Analysis.
You’ll be able to assist forestall fraud towards your little one by freezing their credit score. This brings us to a different widespread preliminary report in a toddler’s credit score historical past: Freezing their credit score will begin their credit score file, albeit a frozen one.
“[The consumer freeze] is a superb software that’s on the market,” Poe says. “It’s a good useful resource for households.”
Poe defined that after frozen, a toddler’s credit score will stay frozen till somebody supplies the required documentation to take away it. Mother and father could make these choices for his or her kids, or a toddler can request to have their credit score unfrozen or frozen after they flip 16.
When does a toddler get a credit score rating?
The easy reply is, they don’t. Simply because a toddler has a credit score historical past doesn’t imply they’ve a credit score rating. They merely aren’t sufficiently old.
“The kid is not going to have a credit score rating till they flip 18,” says Andrada Pacheco, govt vp and chief information scientist at VantageScore. She explains that even kids with credit score histories, both as a result of they’re licensed customers on their dad and mom’ playing cards or for different causes, is not going to have scores till they attain 18.
As soon as they’re adults, it might nonetheless take a while for a credit score rating to generate. Getting a rating requires a sure quantity of knowledge in your credit score file. VantageScore can typically generate a rating inside a month of an eligible account being added to your file, nevertheless it might take six months of exercise to generate a FICO rating.
Within the case of younger adults who’ve been added as licensed customers, they’ll profit from their dad and mom’ prolonged credit score histories that assist pad their recordsdata, however that assumes the issuing financial institution reviews the exercise of licensed customers, and never all of them do. Most main banks do report licensed consumer exercise, together with Capital One, Financial institution of America and Uncover. Just a few, equivalent to American Specific and Chase, solely report exercise for licensed customers who’re 18 or older. If it’s essential to your plans, confirm instantly together with your issuer whether or not they report licensed consumer exercise or not.
Why it’s possible you’ll need to add your younger little one as a certified consumer
Junior received’t have a credit score rating till he’s 18, however that doesn’t imply you possibly can’t add him as a certified consumer in your bank card proper now.
Now we have beneficial including your little one as a certified consumer so long as your credit score is powerful and you’ve got the dialog with them. It’s a comparatively low-risk approach to start constructing credit score.
— Margaret Poe, head of shopper schooling, TransUnion
Assuming your financial institution permits youthful licensed customers — some don’t have any age restrictions whereas others require the licensed consumer to be 13 or older — there’s nothing improper with including your little one after they head off to kindergarten. Maybe you see it as an merchandise to test off the checklist so it’s accomplished when the time comes in your little one to start utilizing a card. Or perhaps your little one is sufficiently old to start to know bank cards and budgeting, and this can be a monetary literacy lesson for them.
In both case, simply know that including them at six years previous and including them at 16 years previous received’t finally have an effect on the credit score historical past enhance you’re giving them.
For instance, I’ve a 20-year-old credit score account. If I add my 10-year-old son as a certified consumer in the present day, his credit score file will present a 20-year credit score historical past. If I wait and add my son to the account when he turns 16, he’ll have a 26-year credit score historical past. Both manner, when he turns 18, assuming my credit score historical past is sufficient to make his file scorable, his credit score rating ought to profit from my 28-year-old bank card in his credit score historical past. And, sure, which means his credit score historical past will likely be older than he’s, however that received’t negatively have an effect on him.
There isn’t a info on the credit score report exhibiting the variety of years because the little one has been added as a certified consumer, simply that the kid IS a certified consumer on the mother or father’s bank card.
— Andrada Pacheco, Government vp and chief information scientist, VantageScore
“I did it myself for my daughter when she turned 16 — simply two years forward of the time,” Pacheco says.
In line with Pacheco, the common VantageScore 4.0 for 18-year-olds was 652, thought-about “close to prime,” as of February 2025. On common, 18-year-olds who’re licensed customers on a bank card account have a one-point benefit over those that don’t. That one level could not sound like a lot, however VantageScore considers scores of 661-780 to be “prime,” and transferring into that bracket might make a big distinction in credit score phrases and approvals. In different phrases, at this stage of an individual’s credit score journey, each level could make a distinction.
For Pacheco, although, including a toddler as a certified consumer is as a lot about instructional alternatives as it’s about boosting their scores down the street.
“The recommendation could be to attend till the kid is definitely accountable sufficient to deal with it himself or herself,” Pacheco says. “It’s a terrific instructing software. It’s essential for them to know what credit score is and that it’s essential to make use of credit score responsibly.
“Present them the assertion,” she advises. “’These are my fees. These are your fees. Should you had a price range for the month, what do you must do to handle this and what do you must take into consideration?’”
Causes you may need to wait so as to add kids as licensed customers
Your little one received’t understand any extra credit score rating advantages from being added as a certified consumer properly earlier than they flip 18, so you’ve got the liberty to attend to make the choice. And there are good causes to attend.
Maybe most significantly, including your little one as a certified consumer creates a credit score file for them. Certain, that’s finally what you need, however after they’re very younger, it’s possible you’ll simply be creating a chance for fraud.
The 2024 Javelin survey discovered that 1 in 8 kids has had their identification uncovered in an information breach prior to now six years, and 1 in 43 has had personally identifiable info uncovered in an information breach inside the previous 12 months.
“If there’s a breach, [your child’s] info is on the market,” Pacheco says, including that she doesn’t see any profit in including your kids earlier than they’re sufficiently old to make use of the cardboard or perceive the accountability.
In reality, Pacheco and Poe agree there’s an academic side to including your little one as a certified consumer, and ready till they’re sufficiently old to take part within the determination could possibly be useful.
“When you’re within the couple of years’ window of 16 to 18 [years old], it’s time to start out serious about it,” Poe advises. “I’d first take into account the place I’m at proper now, then I’d take into consideration what’s the want for them, when it comes to credit score for the kid. After which it’s important to make a judgment name about when to start out the method.”
Lastly, a certified consumer in your bank card is a monetary legal responsibility. You, as the first cardholder, are on the hook for any purchases your licensed customers, together with your kids, make. You, after all, don’t have to provide your little one a card the day you make them a certified consumer, however when the day comes that you just do hand over the plastic, be able to handle the costs they could resolve to make.
The kid needs to be sufficiently old to know what’s occurring — the credit score, the accountability.”
— Andrada Pacheco
Government vp and chief information scientist, VantageScore
The underside line
Assuming your financial institution permits it, there’s nothing stopping you from including your little one as a certified consumer in your card after they’re fairly younger. That prolonged credit score historical past will likely be ready for them after they flip 18 and may lend a lift to their rating. Plus, you should use this as a instructing exercise to assist them learn to handle credit score.
However there are some downsides to including younger kids to your bank cards, particularly that it probably opens them as much as the chance of information breaches and fraud by making a not-yet-needed credit score file. Additional, add them too early, and you might miss out on a pure alternative to speak to them about what you’ve accomplished and the accountability it entails.
Finally, the when is as much as every mother or father to resolve. Consultants agree, nevertheless, that including them by their mid-to-late-teens is a beneficial time for max credit score rating profit and age-appropriate private finance instructional alternatives.
