How to start building your child's credit history
Your child's credit history begins when they are added to a financial account in their name or as an authorized user. The earlier you start, the longer their credit record will be by the time they need to borrow money for a car, apartment, or education. Most children can become authorized users on a parent's credit card as early as age 13, though some card issuers allow it at younger ages.
Building credit takes time — typically three to six months of consistent payment history before a credit score appears. The goal is to show lenders that your child can handle borrowed money responsibly. This means making on-time payments, keeping balances low, and maintaining accounts over time.
Key Takeaways
- Adding your child as an authorized user on your credit card is the fastest way to build their credit history, as the account activity reports to their credit file.
- A secured credit card requires a cash deposit but lets your child build credit independently once they are old enough to hold an account in their own name.
- Payment history is the most important factor in a credit score, so set up automatic payments or reminders to avoid missed payments.
- Checking your child's credit report annually helps you catch errors and monitor progress as their score builds.
Adding your child as an authorized user
An authorized user is someone added to an existing credit account who can use the card but is not legally responsible for the debt. When you add your child as an authorized user on your credit card, the account history — including payment dates and balances — reports to their credit file. This is the simplest way to build credit because you control the account and your child benefits from your payment history.
Call your credit card issuer and ask to add your child as an authorized user. You will need to provide their full name and date of birth. Most issuers do not require a Social Security number for an authorized user, though some do. The card company will typically mail a card in your child's name, or you can request that they not issue a physical card if you want to control spending yourself.
Choose a card where you have a long, clean payment history and a low balance. The better your account looks, the more it helps your child's credit. If you carry high balances or miss payments, that negative history will also report to your child's credit file, so this strategy works best if your own credit habits are solid.
Opening a secured credit card in your child's name
Once your child is old enough to hold an account — usually 16 or 18, depending on the issuer — they can open a secured credit card in their own name. A secured card requires a cash deposit, typically between $200 and $2,500, which becomes the credit limit. Your child uses the card like a regular card, makes monthly payments, and builds their own credit history.
After 6 to 18 months of on-time payments, many issuers will convert the secured card to a regular unsecured card and return the deposit. Some cards allow you to be a co-signer, which means you are legally responsible if your child does not pay, but it also lets them build credit faster because the issuer takes on less risk.
A secured card is useful if your child wants to build credit independently or if you want them to learn responsibility by managing their own account. The deposit stays in a savings account at the bank, so the money is not lost — it is held as collateral. Make sure your child understands that they must make at least the minimum payment on time each month, or the missed payment will damage their credit.
Using a student credit card
Student credit cards are designed for people in college or trade school and often have lower credit limits and fewer rewards than standard cards. They typically require proof of enrollment and may not require a deposit. Student cards report to all three credit bureaus, so they build credit the same way a regular card does.
The main advantage of a student card is that it is easier to open without an existing credit history. The main disadvantage is the lower limit — often $500 to $1,000 — which means your child has less room to make mistakes. If they max out the card or miss a payment, the damage to their credit score is more visible because the balance-to-limit ratio is higher.
Setting up payment reminders and automatic payments
Payment history makes up 35 percent of a credit score, so on-time payments are the single most important factor in building credit. Set up automatic payments from your child's checking account to cover at least the minimum balance each month. Automatic payments remove the risk of forgetting and may support the payment reaches the card company on time.
If your child is managing the card themselves, set up a phone reminder a few days before the due date so they have time to make the payment manually if they prefer. Many card issuers also offer email or text alerts when a payment is due. The goal is to make it nearly impossible to miss a payment by accident.
If your child does miss a payment, contact the card issuer when ready. Some issuers will waive a late fee if it is the first missed payment and you call within a few days. A single late payment will lower their credit score, but the damage decreases over time as they build a longer history of on-time payments.
Monitoring your child's credit report
Your child is may have access to to a free credit report from each of the three major credit bureaus — Equifax, Experian, and TransUnion — once per year. You can order all three reports at once at AnnualCreditReport.com, which is the official government site for free credit reports. Check the reports for errors, such as accounts you did not open or incorrect payment dates.
If you find an error, contact the credit bureau in writing and provide documentation of the correct information. The bureau has 30 days to investigate and correct the error. Errors are uncommon but can happen, especially if your child's name is similar to someone else's or if an account was opened fraudulently.
You can also monitor your child's credit score using free tools offered by many banks and credit card issuers. These tools show the score and the factors that are helping or hurting it. As your child builds credit, the score should gradually increase, especially after the first six months of on-time payments.
Teaching your child about credit responsibility
Building credit is also an opportunity to teach your child how credit works. Explain that a credit card is borrowed money that must be paid back, and that interest charges explore if the balance is not paid in full. Show them how a small balance can grow if payments are missed, and how a high balance on a low-limit card can hurt their credit score.
If your child is an authorized user, involve them in the process by showing them the monthly statement and explaining how the payment is made. If they have their own card, require them to check the balance regularly and understand how much they are spending. The earlier they learn these habits, the more natural they become.
Set clear rules about what the card can be used for. Some parents allow their child to use the card only for specific purchases, like gas or groceries, to limit spending. Others require their child to pay back the balance themselves. Whatever approach you choose, consistency and clear communication prevent misunderstandings and help your child develop good financial habits.
Frequently Asked Questions
What age can my child become an authorized user?
Most credit card issuers allow authorized users as young as 13, though some require 16 or 18. Call your card issuer to ask their specific age requirement. There is no legal minimum age, so policies vary by company.
Will my child's credit score go down if I add them as an authorized user?
No. Adding an authorized user does not affect your credit score. However, if the account has a high balance or late payments, that negative information will report to your child's credit file and may lower their score if they have little other credit history.
Can my child build credit without a credit card?
Yes, but it takes longer. Your child can build credit by being listed on utility bills, phone bills, or rent payments in their name, though not all companies report to credit bureaus. A credit card or secured card is the fastest and most reliable method.
What happens to my child's credit if I miss a payment on their authorized user account?
The missed payment reports to their credit file just as it reports to yours. This is why it is important to make on-time payments on any account your child is connected to. If you know you will miss a payment, contact the issuer before the due date to discuss options.
How long does it take to build a credit score?
Most credit bureaus need at least three to six months of account history before they calculate a credit score. After that, the score updates monthly as new information is reported. Building a strong score takes longer — typically one to two years of consistent on-time payments.