Stepping Stones

How to build your adult kids’ credit

If your kid recently graduated college and is struggling to find a place to live, their credit — or complete lack thereof — could be the reason. Good credit is a key to landing apartments, mortgages, credit cards, and loans. So what do you and your adult child do now? Try building their credit by following the steps below.

1. Open a Secured Card

One way to get your kid started building their credit is to help them open a secured credit card. As USA Today reports, with a secured card, you put down a cash deposit that acts as the card’s credit limit. Then your kid can use the card just like a regular card. Their timely payments will be reported to the credit bureaus, which will increase their score.
2. Add Them as an Authorized User
If your kid has no real credit to speak of, you need to get them started as quickly as possible. One easy way to do this is to add them as an authorized user to a credit card in your name. Doing this will not only improve their credit as they pay off bills on time, but they’ll also get a boost from being connected to your established credit history. Of course, this move comes with a lot of responsibility. Make sure your kid is mature enough to handle being an authorized user because if they misuse the card, you’re on the hook for the payments.3. Let Them Move Home

You might want to let your college grad move back home at least for a bit. Not having to shoulder a full rent payment on their own will allow them to have more financial wiggle room. While they’re there, consider putting a bill — like a utility — in their name. That can help build their credit history. Also, if they have student loans, make sure they are making timely payments. And while your kid is living at home, talk with them about the ins and outs of gaining and maintaining good credit. Once they have solid credit footing, they’ll know how to keep it that way.

Chris O'Shea

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